Doctrine of common law mistake can apply to part 36 offer

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, a High Court master has ruled.

Master Thornett said authority was “entirely in support” of this, while nothing about part 36 being a self-contained code excluded it.

O’Grady v B15 Group Ltd [2022] EWHC 67 (QB) is a case where the claimant’s husband was killed by a lorry driven by an employee of the defendant, who was later convicted of causing death by careless driving.

In February 2021, the defendant formally conceded primary liability but made clear that contributory negligence remained live. On 23 February, the claimant’s solicitor made a part 36 that 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 it the following day; the claimant’s replied by email 10 minutes later to make clear that the offer that he intended to make was 80/20 in the claimant’s favour.

The claimant then applied for permission to withdraw or change the terms of her offer.

Master Thornett said the claimant accepted the fundamental principle that part 36 was intended to be a self-contained code “but submits it would be a very peculiar procedural code that can wilfully shut its eyes to a mistake of this kind”.

The claimant said it was “surely always obvious” that the offer was a mistake, not least because the defendant had made an offer many months previously of 60:40 in her favour as well as subsequently admitting primary liability.

The defendant’s position was that part 36 “is both the starting and end point, being a self-contained code”. It argued that the rule committee could have expressly dealt with such a situation but did not.

Master Thornett found for the claimant. He said: “On the particular facts of this case, it is entirely compatible with a procedural code that is intended to have clear and binding effect but not at the expense of obvious injustice and the overriding objective still has application.

“On the facts of this case, I agree with the claimant’s submission that the overriding objective is entirely consistent with the merits of her application and it should be granted.

“Conversely, the overriding objective provides little support for the defendant’s position once mistake is accepted as in issue. Indeed, it is difficult to think how the overriding objective would support the defendant’s position at all.

“Plainly, ‘saving expense’ [r.1.1(2)(b)] does not have as its primary aim the substantial reduction of a party’s liability for damages owing to the mistake of another ‘of a kind which in law would render the agreement void’.”

Richard Wilkinson (instructed by Slater & Gordon) for the claimant. David Brounger (instructed by Kennedys Law) for the defendant.

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Published date
20 Jan 2022

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