COURT REFUSES CLAIMANT’S APPLICATION TO ABRIDGE TIME FOLLOWING LATE SERVICE OF AN OFFER: “THERE IS A POLICY INCENTIVE IN REQUIRING LITIGANTS TO MAKE TIMELY PART 36 OFFERS”
The judgment in Henderson & Jones Ltd v Price [2020] EWHC 3276 (Ch) was given in October 2020, but has only recently arrived on BAILII. It concerns late service of a Part 36 offer. This is an issue rarely considered by the courts and is an interesting example of the court refusing to abridge time for a defendant’s offer so as to make it effective.
“When the offer was sent on 23 September 2020, the claimant was professionally represented and would have appreciated that, to have the favourable part 36 consequences, it had to be served not less than 21 days before trial. The claimant chose not to avail itself of that opportunity. There is a policy incentive in requiring litigants to make timely part 36 offers to encourage the settlement of claims. A defendant is entitled to time to consider the merits or otherwise of accepting or rejecting an offer.”
THE CASE
The claimant brought an action for sums it said was due on a director’s loan account. The claimant obtained judgment for £94,596.10 plus interest.
THE CLAIMANT’S PART 36 OFFER
On the 23rd September 2020 the claimant made a Part 36 offer of £40,000. The claimant had clearly beaten that offer. However the trial started on the 14th October. For the offer to be effective the claimant had to persuade the court to abridge time.
THE JUDGMENT ON THE PART 36 OFFER
District Judge Kelly did not abridge time.
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- An issue falls to be determined as to a part 36 offer that the claimant made. The claimant made a part 36 offer in January 2020 in the sum of £115,000. That offer is immaterial; it is not an offer that the claimant has bettered at trial. By letter dated 23 September 2020 the claimant made a further part 36 offer of £40,000. The sum of £40,000 was obviously far more favourable to the defendant than the judgment sum.
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- The effect of CPR 36.17(7) is that the consequences of a part 36 offer that has been made less than 21 days before trial do not apply unless the court has abridged the relevant period. The claimant submits that the court should abridge the relevant period so as to allow for the consequences under subsection (4) in circumstances where:
(1) this was the second offer that had been made, the claimant already having tried to resolve matters earlier on this year; and
(2) the offer that was made of £40,000 was so attractive to the defendant that the defendant should properly have accepted it so as to avoid the need for this trial to take place.
- The court has a discretion as to whether to abridge time for service. In my judgment this is not an appropriate case for the court to exercise its discretion to abridge time. The starting point is that the part 36 consequences will not apply if an offer is made less than 21 days before trial. The earlier offer in January 2020 is of no relevance in circumstances where the claimant has not bettered the terms of that offer. When the offer was sent on 23 September 2020, the claimant was professionally represented and would have appreciated that, to have the favourable part 36 consequences, it had to be served not less than 21 days before trial. The claimant chose not to avail itself of that opportunity. There is a policy incentive in requiring litigants to make timely part 36 offers to encourage the settlement of claims. A defendant is entitled to time to consider the merits or otherwise of accepting or rejecting an offer. Taking those factors into account, I am not prepared to exercise my discretion to abridge time.