Part 36 offers not a “trump card” against Unless Orders

November 12, 2018

The topic of Part 36 offers is one upon which this blog has previously focussed and one, no doubt, upon which further articles will be written. This is likely to come as little surprise to readers, given that, used properly, Part 36 offers are a valuable and powerful tool to potentially bring about settlement either of the matter as a whole, or at the very least distinct parts.

 

It is therefore always of interest when a new judgement is handed down, giving further guidance on the effects of this most useful and effective part of the CPR.

 

In the latest ruling, a negligence claim against London law firm Hugh Cartwright & Amin (HCA) brought by David and Anjana Devoy-Williams (David Devoy-Williams & Anjana Devoy-Williams v Hugh Cartwright & Amin [2018] EWHC 2815 (Ch)), Mrs Justice Falk found that a Part 36 offer is not “…some form of trump card…” which could or should override any previous court orders.

 

The matter involved an application for permission to appeal and, if permission was granted, an appeal by Mr & Mrs Devoy-Williams against an order made in the Central London County Court on 24 January 2018. Permission to appeal was granted, with Falk J noting that

 

…the immediate starting point was an Unless Order granted on the application of the respondent [HCA]…[the] order provided, among other things, that the appellant’s claim would be struck out and judgement entered in favour of the Defendant unless certain documents were provided by a deadline of 4 p.m. on 21 October [2016].”

 

HCA considered that the terms of the Unless Order had not been complied with and applied for judgement to be entered; CPR 3.5(2).

 

An order was subsequently made on 11 November 2016 for the claim to be struck out and, upon Mr & Mrs Devoy-Williams application thereafter, the court made a further order on 21 November 2016 setting aside the previous order striking out the claim, with liberty for either party to apply to set that further order aside, which HCA did by way of an application on 1 December 2016.

 

In the intervening time, HCA’s insurers put forward a part 36 offer to settle the claim which Mr & Mrs Devoy-Williams received on 10 October and sought to accept on 1 November 2016, some 11 days after the deadline which had been set for compliance with the Unless Order. An issue therefore arose as to whether or not such acceptance could be effective in the face of the strike out, HCA contending that the claim had been struck out as of 21 October 2016.

 

Falk J found that, the request for the strike out having been made “…against the background of continued delays in providing documents requested, including earlier failures to comply with orders for disclosure…”, and concluding further that

 

The breaches of the orders were serious, and it was wrong to test this, as counsel for the appellants sought to do, simply in the context of the part 36 settlement offer and purported acceptance.

 

It was also wrong to conclude that because the unless order required early disclosure with a view to seeking to narrow the issues and hopefully to allow settlement to occur, that that somehow made the failure to comply less serious than a failure to make standard disclosure.

 

ultimately concluding that she could not find, as contended for by the Claimants, that the Part 36 offer made after the unless order rendered compliance immaterial and that to do otherwise would be “…thwarting the purpose and effect…” of the order. In reaching this conclusion, Falk J also took into account that, whilst the Claimants were litigants in person, she found that they

 

…were not unsophisticated and indeed, although they were acting as litigants-in-person through much of the process, they in fact benefited from professional advice at a number of stages.

 

finding further that

 

 “Disclosure would have remained material if the claim had not settled, and the fact that the order for disclosure may have been motivated by the aim of facilitating settlement does not affect the question of whether there had been a material failure to comply.

 

 “I do not agree with counsel for the appellants’ submission that the judge was not entitled to have regard to the fact that relief from sanctions was applied for late.

 

The appellants were aware by early November 2016 that the respondent’s position was that there had been breaches of the unless order.

 

Falk J noted further

 

Whilst it is certainly right that an unless order should not be made simply for good housekeeping purposes, and it is usual for there to have been a breach of a prior order before an unless order is made, the judge clearly took account of the history of the proceedings, with which she was extremely familiar, and specifically the appellants’ conduct in them.

 

and thus found that the effect of the strike out could not be overturned or modified by the existence of a Part 36 offer.

 

This judgement, once more, reinforces the necessity for not only an appreciation of the operation of the various rules and the interplay between them, but also the need to have regard to aspects which may, at once, appear peripheral but are in fact fundamental when considering any Part 36 offers, such as in this case whereby, had the offer been accepted before termination of the deadline under the Unless Order, the outcome of this matter would have been very different.

 

For all costs related queries, be they in respect of Part 36 or any other aspects, please feel free to contact us on (01772) 435550, by e-mail at costs@sphcosts.com or why not try our Live Chat facility?

 

 

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