Practitioners will of course be familiar with Part 36 of the Civil Procedure Rules (“CPR”); a self-contained procedural code that is carefully structured and highly prescriptive. Yet, despite that careful structure, Part 36 of the CPR continues to contribute to contention between the parties.
The issue of Part 36 compliant offers was raised once again in the recent case of Essex County Council v UBB Waste (Essex) Ltd (No3) [2020] EWHC 2387 (TCC).
The Facts in Brief
- The Claimant had sent a Part 36 offer to the Defendant, timed at 4.54pm on 7th March 2019;
- Part 36 offers are considered to have been made when they are served;
- In accordance with rule 6.26, the Claimant’s offer was deemed served on 8th March 2019, as it was sent after 4.30pm;
- The Defendant argued that as a result of the offer being deemed served one day later than it was sent – and when considering that the Claimant specified that the offer was capable of acceptance for a “period of 21 days of the date of this letter” – the offer was therefore not compliant with the specific wording contained within Part 36;
- As a result of the above, the Defendant argued that the offer failed to specify a relevant period of not less than 21 days for acceptance.
The Decision
Mr Justice Pepperall declined to construe the offer letter “divorced” from its proper context, suggesting that a “reasonable person having all the background knowledge available to the parties would know that…the letter was intended to be a Part 36 offer and that…the statement in the letter was intended to be the statement of a relevant period in compliance with r.36.5(1)(c)”.
In accordance with the reasoning in C v D [2011] EWCA Civ 646, Pepperall J concluded that construction of the offer was “consistent with the clear intention to make a Part 36 offer and ensures that the offer is effective rather than ineffective”.
Pepperall J went on “I consider that, as a matter of policy, the responsibility for ensuring that an offer is compliant with Part 36 should lie squarely upon the offeror and his lawyers. There are two very simple answers to the unrelenting stream of cases which, as Coulson LJ observed in King, litter the law reports in which parties seek to obtain the benefits of Part 36 despite making non-compliant offers:
a) As has been repeatedly stressed by the Court of Appeal and as the rules clearly explain, there is no problem with a party making an offer outside Part 36. Such offers will be taken into consideration under Part 44 but will not gain the special advantages of Part 36.
b) As the commentary in Civil Procedure (the White Book) makes clear at paragraph 36.5.2, much of the difficulty would be avoided if parties would only use form N242A to make their offers”.
In conclusion and what has clearly been demonstrated within several decisions on the point, it is simply imperative that practitioners ensure that their Part 36 offers are compliant with the rules. If in doubt, utilise the prescribed form N242A.
