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Part 36 of the Civil Procedure Rules sets out structured and highly prescriptive procedural requirements for the making of offers and the costs consequences where such an offer is not accepted, or not accepted and the offeree fails to do better at trial. If an offer does not comply with the procedural requirements, it will not be held to be compliant and will not have those costs consequences.
In the latest of a long line of cases, the Court of Appeal has held that the failure to make any reference to the 'relevant period', which is defined in Part 36 as "a period of not less than 21 days within which the defendant will be liable for the claimant's costs in accordance with rule 36.10 if the offer is accepted" (36.2(2)(c)), is fatal to the offer.
In PHI Group Ltd v Robert West Consulting Ltd, PHI Group's offer of settlement, though said to be made pursuant to Part 36 and despite complying with all the other requirements of a Part 36 offer, failed to comply with 36.2(2)(c). No reference to the relevant period was made at all.
The Court of Appeal, agreeing with the judge at first instance, held that as the offer did not specify any period it did not comply with the mandatory requirements and the offer was not a Part 36 offer. This was despite the fact that it was plainly intended to be so from the heading of the letter and the repeated references to Part 36 in it. There was no ambiguity in the offer re the relevant period that could be construed as complying with Part 36, as there had been in other cases. There was simply no mention of it.
Things to consider
When making a Part 36 offer, the mandatory requirements should be considered and must be included. If they are not, the court won't imply them. Any ambiguity in a Part 36 offer may be construed to make the offer compliant but where there is an omission, as opposed to an ambiguity, that can prove fatal, as here.
In the latest of a long line of cases, the Court of Appeal has held that the failure to make any reference to the 'relevant period', which is defined in Part 36 as "a period of not less than 21 days within which the defendant will be liable for the claimant's costs in accordance with rule 36.10 if the offer is accepted" (36.2(2)(c)), is fatal to the offer.
In PHI Group Ltd v Robert West Consulting Ltd, PHI Group's offer of settlement, though said to be made pursuant to Part 36 and despite complying with all the other requirements of a Part 36 offer, failed to comply with 36.2(2)(c). No reference to the relevant period was made at all.
The Court of Appeal, agreeing with the judge at first instance, held that as the offer did not specify any period it did not comply with the mandatory requirements and the offer was not a Part 36 offer. This was despite the fact that it was plainly intended to be so from the heading of the letter and the repeated references to Part 36 in it. There was no ambiguity in the offer re the relevant period that could be construed as complying with Part 36, as there had been in other cases. There was simply no mention of it.
Things to consider
When making a Part 36 offer, the mandatory requirements should be considered and must be included. If they are not, the court won't imply them. Any ambiguity in a Part 36 offer may be construed to make the offer compliant but where there is an omission, as opposed to an ambiguity, that can prove fatal, as here.