High Court holds that period was clear to reader given earlier offers
A part 36 offer that failed to specify the ‘relevant period’ in which it should be accepted complied with the rule because the reader would understand it to refer to 21 days, the High Court has decided.
Mr Justice Calver said
In Henderson & Jones Ltd v Salica Investments Ltd & Ors [2025] EWHC 838 (Comm), the claimant was a litigation funder which, as assignee, successfully brought a claim for breach of confidence against the first and fourth defendants. It was awarded approaching £2.2m in damages.
As part of the consequentials hearing, the judge had to decide whether the claimant’s part 36 offer was valid. It said: “If the Defendant accepts this Part 36 Offer after the end of the Relevant Period, they will be liable for the Claimant’s Costs…”.
There was no definition of ‘Relevant Period’ and so the defendants argued that the offer was defective for failing to satisfy the requirement of rule 36(5)(1)(c), which says an offer must “specify a period of not less than 21 days within which the defendant will be liable for the claimant’s costs in accordance with rule 36.13 and 36.20 if the offer is accepted”.
The defendants argued the ‘Relevant Period’ could have been any period of time and there was no assumption that it would be 21 days. To find the offer valid in such circumstances “would be liable to cause substantial uncertainty in other cases”, they submitted.
But the claimant pointed out that 21 days was specified in its previous part 36 offer five months earlier and the defendants’ part 36 offer of a few weeks before that. The offer was “plainly intended” to adopt the same definition and be compliant with part 36, it said. Moreover, the defendants did not respond to the invitation in the offer to notify the claimant if they considered it to be in any way defective or non-compliant.
Calver J agreed with the claimant. “It can be seen that ‘Relevant Period’ (capital R, capital P), which had been defined as meaning 21 days in the offers up to this point, was not expressly defined in this letter,” he said.
“However, against the background of the earlier correspondence of which this was expressly said to be a part, I consider that a reasonable reader of this correspondence would fully understand that the reference to the (capitalised) ‘Relevant Period’ is a reference to a period of 21 days. There is nothing to suggest that that was no longer the understanding in this chain of offers.
“Moreover, the fact that the defendants did not seek to raise this issue at the time despite having been expressly invited to do so further supports the fact that this was the common understanding between the parties and that neither of them were in any doubt about this.”
The defendants argued that their failure to respond could not give rise to any estoppel under the part 36 regime, citing Essex County Council v UBB Waste (Essex) Ltd [2020] EWHC 2387 (TCC), but Calver J noted that the claimant did not put the case on that basis “and nor does it need to”.
The relevant issue was what the letter “would reasonably have been understood to mean at the time” against the background of the earlier offer letters.
The judge also rejected the submission that the scope for the use of principles of contractual construction was limited where the statutory requirements were not precisely adhered to, again citing the UBB decision.
As a result, the claimant beat the offer and the normal consequences under part 36.17(4) followed.
Hugh Sims KC and Jay Jagasia (instructed by Cardium Law) for the claimant. Edward Brown KC and Alexia Knight (instructed by Foot Anstey) for the first and fourth defendants.