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The Less Advantageous Part 36 Offer: Costs Consequence Following Variation - James Manning, Chartered Legal Executive, Plexus Law

Burrett v. Mencap Limited [2014] LTL 05/09/14 and WL 4355036.

What are the cost consequences of accepting a Part 36 offer where, after the relevant period under r 36.2(2)(c) had expired, an offeror varied the terms of the offer under r 36.3(6) to make it less advantageous? This issue was considered in Burrett v. Mencap Limited [2014].

Facts

Burrett sought damages from Mencap Ltd for personal injuries, losses and damages as a consequence of three accidents she suffered during the course of employment. Burrett alleged that she suffered soft tissue injuries and had developed fibromyalgia. She claimed damages in excess of £100,000. Mencap admitted primary liability for the accidents, but disputed causation and quantum.

Part 36 Offer

On 19 July 2013 Mencap made a Part 36 offer of £15,000.00 gross. This was rejected by Burrett. Crucially, Mencap did not withdraw the offer.

Investigation

As a result of Mencap’s Part 36 offer being rejected, Dr Andrei Calin, Consultant Rheumatologist, was commissioned to examine Burrett and prepare a medico-legal report. A claims investigator was also instructed to conduct covert surveillance of Burrett.

Dr Calin’s Evidence

In Dr Calin’s opinion Burrett did not meet the American College of Rheumatology Diagnostic Criteria for fibromyalgia and, more importantly, there were doubts as to whether she suffered any soft tissue injury/injuries as a result of the accidents.

Covert Surveillance

Covert surveillance revealed that Burrett had grossly exaggerated the extent and severity of her ongoing symptoms and inability to perform day-to-day tasks.

Social Media Evidence

The claims investigator also found on YouTube footage of Burrett playing a violin at a concert. She carried a baby in sling during the performance.

The Less Advantageous Part 36 Offer

On 17 January 2014, several months after the 21-day relevant period had expired, Mencap served notice on Burrett revising the terms of the original Part 36 offer. The revised, less advantageous offer was £2,500 gross and excluding CRU. The notice deliberately made no reference to the relevant period under r 36.2(2)(c). Mencap subsequently served Dr Calin’s medical report, the surveillance and YouTube evidence.

Following receipt of Dr Calin’s report, the surveillance and YouTube footage, Burrett accepted the revised Part 36 offer and issued an application for a determination on costs on the premise that the revised offer constituted a fresh/second Part 36 offer or that there was an extension of the relevant period to consider the revised Part 36 offer.

Judgment

District Judge Ackroyd, sitting at Portsmouth County Court on 14 May 2014, had to decide whether on variation of a Part 36 offer, the time for acceptance is fixed by the time for acceptance of the Part 36 offer made on 19 July 2013 or whether a fresh period of time begins to run from the date of the variation. He considered the provisions of Part 36 and specifically r 36.2, r 36.3, 36.7 and 36.10

DJ Ackroyd held that r 36.7 is silent as to any extension, renewal or replacement of the time for acceptance when the terms of a Part 36 offer are changed to make it “less advantageous”. Furthermore, there is no authority allowing an implied entitlement to the relevant being renewed when the terms of the Part 36 offer were changed to make it “less advantageous”.

DJ Ackroyd held that the time limits specified in the Part 36 offer dated 19 July 2013 applied and so Burrett’s application was dismissed. The following costs order was made:

  1. Mencap to pay Burrett’s costs to 12 August 2013; and

  2. Burrett to pay Mencap’s costs thereafter.

Practical Points

As Part 36 stands:

  1. A Claimant can change the terms of a Part 36 offer to make it “less advantageous” to the Defendant by making a higher offer;

  2. A Defendant who wants to make a lower Part 36 offer would be unwise to withdraw it and make a fresh Part 36 offer;

  3. A Defendant should revise the terms of a Part 36 offer to make it “less advantageous” to the Claimant – although note r 36.14 (6)(b);

The Future

The Civil Procedure Rules Committee has announced that it is considering reforms to simplify Part 36. Will the cost consequences of accepting a “less advantageous” Part 36 offer before trial be simplified?

James Manning
Chartered Legal Executive, Plexus Law

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