THE COURT CANNOT EXTEND TIME FOR ACCEPTANCE OF A PART 36 OFFER: HIGH COURT DECISION

A defendant is entitled to make an early Part 36 offer. This, undoubtedly causes difficulties for many claimants. The rules relating to late acceptance are fairly unsympathetic. Nor is it possible to for a claimant to make a prospective application to extend time for acceptance without the usual cost penalties. In Begum -v- Barts Health NHS Trust [2022] EWHC 1668 (QB) Master Thornett rejected an argument that the court had any power to extend time for the acceptance of a Part 36 offer.

 “There already exists provision at CPR 36.12(4) for the court to decide costs upon the acceptance of an offer after expiration of the “relevant period”, as the above cases illustrate. The Claimant’s proposition that there exists an additional facility for the court to make a similar decision but on a pre-emptive basis is, at face value, a surprising and seemingly unfair one.”

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THE CASE

The claimant, a protected party, brought an action for clinical negligence against the defendant.  Liability was admitted but causation denied. The defendant made a Part 36 offer £100,000.

The claimant stated that it was impossible to quantify the case and requested an extension of the time for acceptance. The defendant refused to extend time but stated that the offer was still open for acceptance.

THE CLAIMANT’S APPLICATION

The claimant applied  to the court for an order extending time for acceptance of the offer without the normal costs penalties.

THE MASTER’S DECISION

Master Thornett refused the Claimant’s application.

NO POWER UNDER PART 36 TO MAKE THE ORDER SOUGHT

The Master found that there was nothing in Part 36 that allowed such an order to be made.

10.  I am not satisfied there is any inherent provision in Part 36 for the court to vary or rewrite the period for acceptance of a Part 36 offer. If there is no such procedure, it follows that neither (at least within Part 36) can there be provision for the court to direct in advance the costs consequences of accepting an offer as rewritten by it.

NO POWER ANYWHERE ELSE IN THE RULES

Nor could the power be extrapolated from CPR 3.1(2)(a)

11.2  As an alternative to her primary submission that the court had jurisdiction under Part 36 to vary the terms of the offer, Miss Lumbers submitted that power do so existed by way of r.3.1(2)(a). No case law was produced by either party in support of the proposition that r.3.1(2)(a) could apply to this type of Application. Miss Lumbers submits that the rule is self-evident in its potential application.
11.3  I accept here the Defendant’s submissions that this rule is not apt for application to Part 36, as being (to repeat) a “self-contained code about offers”. Rule 3.1(2)(a) refers to the power to adjust the time for compliance, not to adjust periods of time otherwise featured in rules.
11.4  The starting point is that there is no obligation upon a defendant to make any offer of settlement, by way of Part 36 or otherwise, and so the making of an offer cannot reasonably be said to be “in compliance with any rule, practice direction or court order”. An offeror has an absolute discretion when to make an offer and, if it does so, it does so entirely voluntarily. There is no “compliance” in deciding to make an offer and neither, it follows, does the court have any jurisdiction to direct the making of such an offer “in compliance with any rule, practice direction or court order”. The court can, of course, facilitate ADR and settlement discussions by, for example, incorporating reference to the same in its directions or, if appropriate, ordering a stay. I agree with the Defendant’s submission, however, that the court cannot require a party to settle a case if the party does not want to; or to dictate the terms on which a party makes an offer.
11.5  It is correct that r.36.5(1), in prescribing the form and content of a Part 36 offer, therefore engages questions of compliance. However, one cannot conflate compliance with rules going to form and content with compliance with the “time” for doing something. Not least because this concerns different parties in differing events of compliance: a defendant in the formulation of the offer and claimant in accepting an offer within the relevant period. Further, whilst the form and content of the offer are subject to rules, there is no rule as to when an offer should be accepted, only rules going to the consequences of not doing so.
Further, I am satisfied that the operative phrase in r.3.1(2)(a) is “time for compliance” and without division. It is artificial to extrapolate the word “compliance” in isolation and then seek to apply it in the wider context of how an offer is drafted. The rule is there fairly to regulate time periods for compliance but not override time periods as are the sole prerogative of a party to decide when drafting an offer of settlement.

GENERAL OBSERVATIONS

12.  There already exists provision at CPR 36.12(4) for the court to decide costs upon the acceptance of an offer after expiration of the “relevant period”, as the above cases illustrate. The Claimant’s proposition that there exists an additional facility for the court to make a similar decision but on a pre-emptive basis is, at face value, a surprising and seemingly unfair one. Unfair because it precludes full consideration of all facts that might be relevant at the point of acceptance, rather than at an earlier stage. Further, if granted, it would fetter the offeror’s right freely to withdraw a Part 36 offer after the relevant period but without the permission of the court. It increases a defendant’s costs exposure in a way that emasculates the costs effectiveness and hence significance of the making of a Part 36 offer. I note the Defendant’s submission that, at least in the case of commercial claims where interest on the claim can be considerable, an extension by the court of the relevant period could quickly distort the precision of an interest inclusive offer to the point of it having little if any effect at a subsequent date.
The notion that there exists a residual discretion of the court, either as argued by the Claimant in this Application or otherwise, is not easy to follow against the intended strict application of the provisions of Part 36 .