The High Court has ruled that a claimant’s part 36 offer was a counter-offer, meaning that an earlier common law offer by the defendants no longer remained open for acceptance.
Andrew Hochhauser QC, sitting as a High Court judge, said there was “apparently no authority directly on the point”.
Mr Hochhauser said he preferred the arguments of counsel for the defendant law firm, Jacobs Solicitors, which was being sued for professional negligence by the bank DB UK.
“A part 36 counter-offer is still a counter-offer,” he said. Mr Hochhauser said that because in the case “one is dealing with an initial common law offer, the impact on it of any counter-offer has to be addressed by reference to common law principles”.
This meant that once the bank’s part 36 offer was made in May 2016, the law firm’s earlier ‘without prejudice save as to costs’ letter was no longer available to be accepted.
Delivering judgment in DB UK Bank v Jacobs Solicitors (claim no. HC2013000358), Mr Hochhauser said the bank argued that that the law firm had “failed adequately to report” on the fact that the bank’s borrower was purchasing a new-build property by way of a sub-sale, and claimed over £162,000 in damages.
Jacobs argued that the bank would have made the loan in any event and pleaded contributory negligence. The law firm denied that the claim had been settled. The bank argued that it had.
The court heard that a few days before trial, at the end of last month, the bank’s solicitors, Rosling King, sent Caytons Law, acting for for Jacobs, a letter saying that it was accepting a without prejudice offer made by Caytons in August 2015.
The judge rejected an argument by the bank that the offer was not capable of acceptance on the grounds of uncertainty.
However, Mr Hochhauser said that in May this year Rosling King sent Caytons a letter containing a part 36 offer. Counsel for Jacobs argued that this was a counter-offer, which had the effect of rejecting the earlier without prejudice letter.
The judge agreed that once the part 36 offer was made, the law firm’s letter was no longer available to be accepted. As a result there had not been a settlement of the claim, which must proceed to trial.