Part 36 offers subject to the common law doctrine of mistake: O'Grady -v- B15 Group Limited [2022] EWHC 67 (QB) - Rochelle Powell, Temple Garden Chambers
27/01/22. The Claimant brought a claim for damages under the Fatal Accidents Act 1976 in respect of her husband who was killed in a road traffic accident. On 20 April 2020 the Defendant’s solicitors put forward a Part 36 offer, apportioning liability on the basis of a 60/40 split in favour of the Claimant. At this stage, the Defendant had not made any formal admission in respect of liability. This offer was neither accepted nor withdrawn.On 10 February 2021, the Defendant formally conceded primary liability but made it clear that contributory negligence remained a live issue.
On 23 February 2021 the Claimant’s solicitor put forward a Part 36 offer which read:
“The Claimant offers to resolve the issue of liability of on 80/20 basis. For the avoidance of doubt if the Defendant accepts this offer it will only be required to pay 20% of the Claimant’s damages.”
The Defendant’s solicitor accepted the Claimant’s offer by e-mail at 10:02 on 24 February. The Claimant’s solicitor replied by e-mail at 10:12 on the same day to make clear that the offer that he intended to make on behalf of the Claimant was 80/20 in the Claimant’s favour. The Claimant then issued an Application on 2 March 2021 for permission to withdraw her offer or change its terms under CPR 36.10(2)(b).
The matter was listed for a preliminary hearing on 3 November 2021. Shortly before the hearing, the Defendant conceded that the mistake relied upon by the Claimant’s solicitor in formulating the offer, was of a kind that would render any agreement void if the court were to accept that the common law doctrine of mistake is relevant when considering Part 36 offers.
The Application came before Master Thornett on 9 December 2021. The question for determination was whether the common law doctrine of mistake could apply to the self-contained code within Part 36. The Claimant’s case was that there is no reason, either by reference to Part 36 itself or case law, why a mistake in the formulation of a Part 36 Offer, known to be a mistake by the recipient, should not prevent that offer from constituting an effective and binding Part 36 offer. It was “always obvious” that the communication of 23 February 2021 was never intended.
The Defendant’s position was that Part 36, being a self-contained code, is both the starting and end point, The application of a strict approach being applied once an offer has been made facilitates certainty and consistency in the operation of a rule that is deliberately intended to codify and simplify the resolution of disputes.
Decision
Various authorities were considered. It was noted that in Rosario v Nadell Patisserie Ltd [2010] EWHC 1886 (QB), Tugendhat J was satisfied that the background of the law of contract could be applied to an offer under Part 36. In that case the issue was whether an offer was a Part 36 offer or alternatively an offer not made under Part 36. Applying the same reasoning, the Master held that there was [20]:
“…no difference in a methodology that analyses the effect of common law mistake on a Part 36 offer when the recipient does accept that the offeror did not intend to be bound owing to mistake. It is simply the application of a different contractual rule and effect but still equally compatible to the context of Part 36.”
Accordingly, the Master determined that Part 36 offers were subject to the doctrine of mistake, where the mistake was obvious [25]:
“I am satisfied that the doctrine of common law mistake can apply to a Part 36 offer in circumstances where a clear and obvious mistake has been made and this is appreciated by the Part 36 offeree at the point of acceptance. Authority is entirely in support with the application of the doctrine. Nothing about Part 36 being a self-contained code excludes it.”
The judge also agreed with the Claimant’s submission that the Overriding Objective was entirely consistent with the merits of her Application and, thus, the application was granted.
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