Part 36 offer to settle “whole of claim” did not include linked claim made later on

The High Court has rejected a bid to construe a part 36 offer in settlement of “the whole of this claim” to include a second linked claim that was made later on in proceedings.

Mrs Justice Jefford said it would only promote confusion if she were to construe “a clear offer as meaning something that it plainly did not”.

Bentley Design Consultants Ltd v Sansom [2018] EWHC 2238 (TCC) concerned a claim for breach of contract and/or professional negligence over the advice given by the appellant/defendant firm of structural engineers, Bentley, on the construction of two properties (Plot 1 and Plot 2).

The claim initially related just to Plot 1 and was for £35,000. Bentley gave a limited admission of breach of duty, but took issue with causation of loss and the damages claimed. It then made an offer of £5,000.

Some time later, Sansom made a part 36 offer of £25,000 to settle “the whole of this claim”; at the time, a claim in relation to Plot 2 was contemplated but had not begun.

The offer was not accepted at this point, but Bentley did agree to Sansom’s suggestion that it would be sensible to handle the two claims together.

In time, amended particulars of claim were filed, adding the claim in respect of Plot 2. The claim in respect of Plot 1 was increased by an additional £5,000 in respect of diminution in value of the house, while the claim for Plot 2 was for substantially more than Plot 1.

Bentley made an offer of £40,000, which was rejected, and then purported to accept the earlier part 36 offer “in full and final settlement of the whole of this claim” – i.e. both plots. Sansom disputed this.

At first instance on the preliminary issue, His Honour Judge Cotter QC held that the part 36 offer only related to Plot 1.

On appeal, Bentley argued that, if the nature and extent of the claim varied in the course of proceedings, the offer remained an offer to settle the whole of the claim (whatever it now was). If that was not what a claimant intended, it was incumbent on him to make that clear either by withdrawing or varying an offer.

Jefford J said the offer clearly related just to Plot 1 as there was not claim for Plot 2 at the time.

“I cannot see that the effect of part 36 is that an offer that was made to accept a sum in settlement of ‘the whole of this claim’ (which was, and is recognised by Bentley to have been, a reference to the extant claim in respect of Plot 1) became, on amendment of the particulars of claim, an offer to settle the claim subsequently made in respect of Plot 2 under a separate contract for works to a separate property.

“Nor do I consider that part 36 requires me to construe the offer in that way or that any of the authorities cited to me drive such a conclusion.

“On the contrary, following the amendment, the offer to settle ‘the whole of this claim’ in respect of Plot 1 became an offer to settle what was now part of the whole of the claim in the proceedings. The offer did not change.”

The judge said her view was reinforced by the facts that the parties had always regarded the Plot 2 claim as a distinct claim and the joinder of the Plot 2 claim into the existing action was a matter of practicality.

“Had that consensual approach not been taken, Mr Sansom would have issued fresh proceedings in respect of Plot 2 and might then have applied to have the two matters joined and tried together. That puts this case into a very different picture from the one in which a further cause of action in respect of the same subject matter is added to the claim or a fresh allegation or further head of damage is added in relation to an already pleaded claim.”

Catherine Piercy (instructed by Kennedys) for the appellant; Tom Coulson (instructed by Nunn Rickard Litigation) for the respondent.

 

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24 Oct 2018

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