A PART 36 OFFER CANNOT BE REDUCED BECAUSE OF A DEDUCTIBLE: AN INSURER IS BOUND BY THE TERMS OF THE OFFER IT MADE

I am grateful to solicitor John McQuater for sending me a copy of the decision in Denton -v- Ms Amlin Underwriting (County Court at Doncaster 6th August 2021). It relates to an insurer defendant attempting to deduct an excess figure from a Part 36 offer. The judge held that the insurer was bound by the clear terms of the Part 36 offer it had made. A copy of the judgment is available here DentonAmlin

THE FACTS

The claimant brought an action for personal injuries. The insurer was joined into the action as a defendant.  This was a case where the provision of the Third Parties (Rights against Insurers) Act 2010 applied. The effect of this is that the claimant has the same rights as the insured.

THE DEFENDANT’S PART 36 OFFER

The defendant insurer made a Part 36 offer of £8,250.00.

The claimant accepted the offer, however the defendant then stated it was entitled to deduct the excess that its insured would have paid.  The claimant subsequently entered judgment for the figure of £8,250.  The defendant insurer then applied to set aside that judgment on the basis that there was a £1,000 deductible that should be taken from the offer of £8.250.00

THE DECISION OF THE DISTRICT JUDGE

The Deputy District Judge did not accept the defendant’s argument. There was a conflict between the Act and the provisions of Part 36.

  • The Part 36 offer was unambiguous and clear.  The sum being offered was £8,250.00
  • The insurer was a defendant to the claim. It chose to use the Part 36 procedure and make a Part 36 offer. This was procedure that stood alone.
  • If the insurer wanted to settle the claim for a sum that took into account the £1,000 deductible there were other methods available to it and it should have used those.
  • The insurer having chosen to use Part 36. The claimant having accepted the Part 36 offer was quite entitled to enter judgment.
  • The second defendant’s application to have that judgment set aside was dismissed.