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You can't accept what's not on offer

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The way the Civil Procedure Rules (CPR) have developed over the last few years has created a fertile ground for litigation particularly in the area of negotiation.

The CPR has complex rules in relation to making offers which is governed by Part 36. In the legal world, a Part 36 offer is an offer to try and settle a claim. Part 36 offers are made in a variety of legal dispute cases including personal injury, which many people may have had experience of.

Making an offer which complies with CPR Part 36 is seen as a tactic to put pressure on your opponent to settle the case early on in the proceedings. The consequences of failing to beat that offer at trial can create a headache for solicitors who have to explain the legal labyrinth of rules and their effects to clients. It can also be argued that a failure to properly advise and/or make a Part 36 offer may amount to a legal claim against an advisor for professional negligence.

A recent case before the Courts concerning litigation in this area was Supergroup Plc v Justenough Software Corp Inc [2014] where the defendants made a Part 36 offer in respect of what they were prepared to accept in relation to their counterclaim in the proceedings.

Later on in the case the defendant confirmed in writing by letter that they had made every attempt to try and settle the claim and therefore confirmed they withdrew all offers and would only settle if the claimant paid damages for their counterclaim and their costs. Shortly after this, the defendant made a higher offer in an attempt to settle.

The claimant shortly after attempted to accept the previous Part 36 offer and filed a Notice of Discontinuance to their claim. The claimant solicitors appeared to misunderstand the implications and rules in relation to Part 36 whereby withdrawal of an offer does not have to be in a specific form.

The High Court stated that any reasonable solicitor would have understood that the defendant’s letter withdrawing all offers meant exactly that. It was not possible therefore to accept what was not still on the table. The Notice of Discontinuance filed did not relate to the defendant’s counterclaim. This meant that the claimant’s claim had been discontinued leaving the defendant’s counterclaim still live and the claimant unable to accept a previous offer in respect of it.

A solicitor’s failure to advise correctly in relation to the Part 36 offer rules can have serious consequences to your case. Your solicitor should make sure that they give you advice on making offers and the litigation risk is brought to your attention early on in the case. Failure to do so may open solicitors up to a claim in professional negligence.

If you feel you have been let down or advised incorrectly by your solicitor you should take advice from a specialist professional negligence solicitor for an assessment of your case.

By Liam Waine, Partner and head of the professional negligence team

Stephensons have specialist professional negligence solicitors who are able to provide clients with an assessment of your case via a range of fixed fee services and alternative methods of funding