Party failed in bid to accept lapsed part 36 offer after start of trial

Late acceptance: claimant missed its chance

The High Court has rejected an application by a claimant to accept a lapsed part 36 offer after seeing the way the trial of their case had begun, with the defendant now keen to “take its chances” on the outcome.

Mr Justice Morgan said to grant the application meant imposing a settlement on the unwilling defendant.

Last December, the defendant in Houghton v PB Donoghue (Haulage & Plant Hire Ltd & Ors) [2017] EWHC 1738 (Ch) made a part 36 offer of £330,000 which was not accepted but also not withdrawn.

According to Morgan J – who is not trying the case – the first two days of the trial took place at the end of the previous week, and “by early Saturday morning the claimant had formed an assessment which differed from his earlier assessment of his position, and he wished to accept the offer which had been made”.

Morgan J cited “persuasive” case law that it may not appropriate to grant permission to accept the offer after seeing “the way the wind is blowing in the trial”.

However, he said there were arguments in favour of the court giving permission, such as saving court time.

Morgan J concluded: “Effectively, what I am asked to do is to impose upon the defendant a liability to pay £330,000, which it is no longer willing to do because it has asked the court to refuse permission.

“The defendant now wishes to take its chances with the trial continuing, so the court is imposing a result, imposing a settlement which is not a voluntary settlement any longer.

“I think that the philosophy exists that where a claimant decides to take his chances with the trial and then repents of his earlier decision to turn down the offer of settlement because the trial, he thinks, is going less well or more badly than predicted, that the court will often take the view that it is not right to give permission to impose a settlement on the reluctant defendant.

“Taking that approach does not mean that permission will never be given. In the course of argument, examples were given of when permission would be appropriate, but those examples do not apply to this case.

“Having endeavoured to assess the points in play, my overall conclusion is that the just result here is to refuse permission to the claimant to accept the part 36 offer.”

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