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    Edwards Wildman Client Advisory - The importance of making and accepting Part 36 offers correctly

    Publications

     

    A recent case has highlighted the importance of following the correct procedure when making, accepting or withdrawing a Part 36 offer. The case of Sutton Jigsaw Transport Limited v Croydon London Borough Council, QBD, 27 February 2013 (unreported) held that a claimant who failed to comply with the requirements of CPR Part 36 by not properly serving the Part 36 offeror with a written acceptance before the offer was formally withdrawn, had not validly accepted the offer.

     

    Sutton Jigsaw sought permission from the court to accept the local authority Croydon LBC's Part 36 offer in accordance with CPR Part 36.9(3), which states that the court's permission is required to accept a Part 36 offer where the trial has started. 

     

    Facts

     

    Croydon LBC had made a Part 36 offer shortly before trial, that was not formally withdrawn after the 21 day period had elapsed. On the first day of the trial, following negotiations between the parties, Sutton Jigsaw sought orally to accept the offer. Croydon LBC argued that oral acceptance was insufficient for the acceptance to comply with the requirements of Part 36. In response, Sutton Jigsaw handed over a handwritten note accepting the offer at 1.58pm. At 2pm, Croydon LBC sent a fax to Sutton Jigsaw's solicitors formally withdrawing the offer. The court was therefore required to decide whether there had been valid acceptance of the Part 36 offer before it had been validly withdrawn by the fax.

     

    Decision

     

    The court refused Sutton Jigsaw's application thereby rejecting its claim that it had sufficiently accepted the offer. CPR Part 36.9(1) expressly states that a Part 36 offer is accepted by serving written notice of the acceptance on the offeror, and Sutton Jigsaw was attempting to plead that the handwritten note was sufficient for compliance with this rule. CPR Part 6.22(3) allows for personal service of documents except where an address for service had been provided. To permit Sutton Jigsaw's application, either by means of dispensing with the rules on service or by ordering substituted service retrospectively, would have given it an advantage over Croydon LBC who had complied with the rules. 

     

    It was therefore held not appropriate to allow the application, and accordingly it followed that there had been no valid acceptance of the offer prior to Croydon LBC's valid withdrawal of it by fax.

     

    Comment

     

    This case, although fact specific with regard to the precise timings and the manner in which Sutton Jigsaw purported to accept the offer, has wider application in terms of the aim and workings of a Part 36 offer. The judge pointed out that Part 36 provides a mechanism by which parties are able to seek to settle claims, and it provides "carrots and sticks" to promote settlements in terms of costs and interest consequences. The clear rules are intended to enable the various consequences to apply, and to put the parties on a level playing field when settlement discussions are taking place. 

     

    It is apparent that the judge did not want to bend the Part 36 rules, or to accommodate a party who did not adhere to them. This should act as a reminder to any party considering making or accepting a Part 36 offer, that the relevant rules must be followed in a proper and timely manner.

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