Part 36 offer withdrawals underlined

Gibbon v Manchester City Council; LG Blower Specialist Bricklayer v Reeves

(Court of Appeal - 25 June 2010)

These cases both deal with the interpretation and effect of Part 36 of the Civil Procedure Rules.

Gibbon was a personal injury action. Liability was admitted and negotiations commenced. The claimant offered to accept £2500 and this was rejected. The claimant made no attempt to withdraw the existing offer. Subsequently, later in the proceedings, the defendant then accepted the claimant's offer.

At first instance, the court found that the defendant was entitled to accept the offer as it was not withdrawn. In the Court of Appeal the claimant argued that the offer had been rejected by the defendant and, under the general principles of law, it could not be accepted. It was found that although the argument was attractive it could not be reconciled with Part 36.

The Court of Appeal held that as Part 36 explicitly puts the onus on withdrawal of offers, the original decision was correct.

Blower arose from a dispute over the claimant's quality of work. The claimant rejected the defendants' complaints and issued proceedings for unpaid invoices. The defendants attempted to settle prior to the matter going to court.

The defendants, therefore, made a Part 36 offer of £8023.14. They then paid outstanding plumbing work of £649.36, which reduced the claim. They made further increased offers and then withdrew all but the initial offer. Negotiations continued but the matter proceeded to trial where the claimant was awarded £8375.94 together with interest and costs.

The defendants appealed, arguing that Carver v BAA (2008) applied in that the judgment was not more advantageous than the enhanced initial offer. The court found the offers made had been superseded and the claimant had emerged as the winner.

The Court of Appeal found that, as the initial offer was not withdrawn, it could not be superseded. It also found that Carver should not be interpreted as opening the way to a wide-ranging investigation of the meaning of advantageous in every case. The weight of the factors taken into account remained a matter for the judge. The decision was within the judge's discretion and the appeal was dismissed.

Comment

Part 36 is a self-contained code and rejection of offers does not have the same effects as in general law. Whilst the decision in Carver was binding, the weight that was applied to it was within the court's wide discretion. Victoria Cargill, BLM Manchester

The following law report contributed by specialist insurance practice Berrymans Lace Mawer (www.blm-law.com) first appeared in Post Magazine on12 August 2010

Disclaimer: The law report contains information of general interest about current legal issues, it does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. Specialist legal advice should always be sought in any particular case.