9 September 2014Print This Post

Claimant trapped by part 36 offer varied after time for acceptance

Offer acceptance: no provision in rules for second period

In what is understood to be the first ruling on the costs consequences of accepting a “less advantageous” part 36 offer, a court has ruled that a claimant effectively had no chance to accept the variation.

Amy Burrett failed to accept a part 36 offer, made in July 2013 by Mencap, for injuries sustained during her employment with the charity. Portsmouth County Court heard that the 21 days allowed for acceptance expired, and the offer “lay on the table”.

District Judge Ackroyd said Mencap later sent Ms Burrett a letter in January 2014, which was not a notice but “specifically a variation”, changing the terms of the July offer under part 36.3(6). This enables the offeror to change the terms of an offer “to be less advantageous” without the permission of the court.

James Manning, chartered legal executive at Plexus Law, which acted for Mencap, said that, following video surveillance, the charity decided to cut its offer from £15,000 to £2,500, but to do this through variation, rather than withdrawing one part 36 offer and putting a new one in its place.

Ruling in Burrett v Mencap(Case no.3YJ59826), DJ Ackroyd said the reduced offer was accepted 16 days after it was made. The claimant applied for a determination on costs on the premise that the second offer constituted a fresh part 36 offer and therefore she was entitled to her costs up to the point it was accepted.

The judge said it might have been thought that where an offer had been changed, there should be “a period of time allowed to the claimant to at least reflect on that change and what the consequences of acceptance or refusing the offer bring to the claimant. That also would make good sense”.

However, the judge said he was “constrained by the rules themselves” and “should not seek to wonder and deliberate with myself what Parliament or the draughtsman there had in mind when the rules were drawn”.

DJ Ackroyd went on: “The fact is that 36.7 is entirely silent as to any extension or renewal or replacement of the time for acceptance. There was the opportunity for it to be specified. It does not.

“36.7(1) tells me when it is made and it tells me when it is effective. It does not tell me if there is a further time allowed for contemplation and I believe that it would have done. I see no authority and no basis from anything I have read or any of the submissions that allows me to find there is an implied entitlement to a period, the relevant period being, as it were, renewed at that point.

“For those reasons, therefore, I find that the terms of the original offer stand and the time that is given in that original offer is the one that applies.” He dismissed the claimant’s costs application.

Mr Manning said that once the ruling, which was published in July, became more widely known, the tactic of varying part 36 offers would be used by others. “I will definitely use it again,” he said. “They thought I was talking nonsense, but the judge agreed with me.

“The claimant thought she had 21 days to accept the reduced offer, but in fact she had no chance. There is no provision for a further period in the rules.”

Mr Manning described the tactic as “all or nothing”, because if the claimant had gone on to beat the less advantageous offer in court, the defendant would be penalised on costs from the date of the original offer.

By Nick Hilborne

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