This article explores whether Part 36 offers to settle a dispute are contractual in nature; Whether offers lapse at the end of 21 days; what is ‘more advantageous’ ?
1. Contractual ?
Ok. Admit it. Who of you reading this, still believes that offers made, can be superseded, and that a counter-offer constitutes a rejection of an earlier offer, reflecting contractual law?
If you still think this way, you would be wrong.
Part 36 is a self-contained code, which provides a structured way to settle proceedings with costs consequences if the offer is beaten, or not beaten.
The main ingredient is that there has to be an offer to pay the other side’s costs or else, it will not fulfill the requirements of Part 36 of the Civil Procedure Rules, and will not be an offer made under Part 36.
See Gibbons v Manchester City Council; LG Blower Specialist Bricklayer Ltd v Reeves [2010] EWCA Civ 726: ‘…Part 36 does not provide that only one offer may be available for acceptance at any time, nor does it provide that a later offer should be treated as revoking or varying a previous offer…’.
2. Offer to lapse after a specific period of time?
A Part 36 offer cannot state that it will be treated as withdrawn if not accepted. It is likely that any such condition may render the offer not to be an offer strictly under Part 36. However, the Court always has a general discretion to have to regard to all of the circumstances.
In C v D [2011] EWCA Civ 646, the Court of Appeal considered Part 36 offers generally, and the mechanism. They considered the effects of the words ‘open for 21 days’.
Part 36 does not exclude time limited offers, but the spirit of Part 36 is that it remains on the table for the Court to consider whether it was reasonable or not.
It can remain open for 21 days, but if you wish to withdraw such an offer, before 21 days expires, it cannot be elected voluntarily, but rather one must apply formally to Court under rule 36.3(5) for permission.
Other rules are of course in place for time limits and acceptance when a Trial has already commenced.
The main reason an offer should not be withdrawn is so as to allow the Courts when deciding costs, to have regard to all of the circumstances under Rule 44.5(3)(a)(ii).
3. What is meant by ‘more advantageous’?
The case of Carver v BAA plc [2008] EWCA Civ 412 explored what was meant by more advantageous for money and non-money claims.
Rather than to provide some discretion, that ruling caused uncertainty as to what Courts would deem more or less advantageous. Indeed, Carver met with disapproval in Gibbon [2010].
The new Part 36.14 (1A), which came into force after 1st October 2011, seeks to create more certainty by defining ‘more advantageous’ as ‘better in money terms by ANY amount, however small.
It seems in the absence of guidance as to what is meant by more advantageous in non-money cases, that we have to rely upon Carver. Supposedly one must ask the hypothetical question with hindsight, ‘Was it worth it?’ ‘Was it worth the fight?’