Offer to settle for no damages was valid under part 36

McGowan: Offer was significant concession

An offer to settle a case for no damages but an admission of liability was a valid part 36 offer and it was not unjust to apply the usual consequences of beating an offer when the claimant won at trial, the High Court has ruled.

In MR v Commissioner of Police for the Metropolis [2019] EWHC 1970 (QB), the claimant was awarded damages for false imprisonment and assault after being arrested on suspicion of harassment and released without charge.

He was granted anonymity as he was “well known in international financial circles”.

The claim was issued in December 2010, and in May 2011 the defendant made a part 36 offer of £4,000 and provided a draft letter of apology.

MR rejected the offer: “He travels extensively in the course of his work. On entry to certain countries, he would have been obliged to declare the fact of his arrest, even though the matter did not proceed to prosecution.”

In September 2012, MR made a part 36 offer of £5,000, on condition that the police admitted liability. He made another offer in May 2013 for £5,000 on condition that the defendant admitted unlawful arrest and ensured that all records of his arrest be removed from police records. The police rejected that offer 13 months later.

Some three years later, MR made a further part 36 offer to settle for no damages, but an admission of liability and reasonable costs.

Six months on, the defendant invited MR to a without prejudice discussion, and said it was willing to provide a letter which MR could show to any authority confirming that no action was taken to prosecute him following his arrest.,

No answer was ever given to that offer and at trial in June 2018, Her Honour Judge Baucher awarded MR damages of £2,750; the High Court rejected the defendant’s appeal.

Though the claimant was the ‘winner’, HHJ Baucher made no order as to costs. She ruled that it would be unjust for the defendant to recover its costs despite MR not beating its initial part 36 offer – because MR’s motivation was not financial – but also unjust to have to pay MR’s costs “when [the defendant] could not, for whatever reason, make the requisite admission”.

On appeal, Mrs Justice McGowan found the offer to forgo a financial remedy if he could obtain the liability admission was “a significant concession and therefore is a genuine part 36 offer”.

This engaged CPR 36.17 and meant MR was entitled to his costs from the expiry of the 21-day offer period.

This was not unjust even though MR failed to respond to the offer of a without prejudice discussion. While the criticism of that failure “has merit (not least as matter of courtesy)”, McGowan J said it did not have any direct effect on the course of the litigation.

“The respondent was not going to make the admission sought; there was no realistic prospect of such a resolution.”

The judge’s view of the offers and counter offers made before July 2017 was “entirely a matter within her discretion and no valid complaint can be made of that view”.

“She was entitled to reach the decision she did as to the position before the making of a good and genuine part 36 offer which was not accepted by the respondent.”

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