March 20, 2020

Zero sum claim: Clyde & Co successful in striking out claim issued despite acceptance of £0 Part 36

Clyde & Co has recently been successful in applying to strike out a claim for abuse of process after the Claimant issued proceedings despite the claim having settled. The Defendant had previously accepted the Claimant's Part 36 offer of £0.

The judgment at Liverpool County Court resulted in the striking out of the claim, and QOCS being disapplied; this resulted in the award of our incurred costs.

Background

The Claimant intimated a claim following an accident at work in September 2018. Our insurer client admitted liability in December 2018, subject to causation.

The Claimant submitted medical evidence and made a Part 36 offer to settle his claim for £0, on the proviso that costs and disbursements were payable on the appropriate basis. This was accompanied by a letter confirming "This offer is made in accordance with and is intended to have the consequences of Part 36 of the Civil Procedure Rules".

The letter then set out the outstanding heads of loss valuing general damages at £4,000 and special damages at £460 yet reiterated that the Claimant would "accept the inclusive sum of £0.00 in full and final settlement." The letter continued that the offer related to "the whole of the Claimant's claim" and was "made on the basis that liability is agreed 100% in the Claimant's favour." Our client accepted the Claimant's offer.

The Claimant's solicitor then attempted to re-send the Part 36, amending the amount of the offer. In response, the Claimant was referred to CPR 36.9(1) which states "A Part 36 offer can only be withdrawn, or its terms changed, if the offeree has not previously served notice of acceptance."

The Claimant's solicitors then issued proceedings on the basis that there was no concluded agreement and that the offer of £0 was a mistake.

Application

We were instructed to act on behalf of the Defendant, and issued an application to strike out the Claimant's claim as an abuse of process. We argued that the claim had been validly compromised, and the Claimant could not rely upon the common law doctrine of unilateral mistake because Part 36 is a self-contained code. In addition, the Claimant had not discharged the burden of showing that there was a genuine mistake of which the Defendant had actual knowledge.

Part 36

At the hearing, District Judge Metcalf found that the Claimant's offer was a valid Part 36 offer. He dismissed the Claimant’s arguments that it was the offer was not properly constructed.

In response to the Claimant’s argument that the offer was ambiguous, the judge concluded the offer was clearly expressed and unambiguous in its terms. Furthermore, whilst the proposed settlement terms may have been surprising to the Defendant, there may have been legitimate circumstances compelling the Claimant to make the offer on the terms that he did.  It was not for the Defendant to investigate or clarify why the offer had been made on the terms it was.

Mistake

In considering whether the Claimant could rely upon the doctrine of unilateral mistake, District Judge Metcalf referred to CPR 36.1 which states: "This Part contains a self-contained procedural code about offers to settle made pursuant to the procedure set out in this Part." We relied upon the case of Draper v Newport, which held that the doctrine of mistake could not be imported into a portal case as the portal rules comprised a self-contained code.

Considering the Defendant's application and CPR Part 36 the judge stated Part 36 was a self-contained code with highly prescriptive terms and there is no rule allowing a compliant Part 36 offer to be set aside on the basis of mistake. Allowing the common law doctrine of mistake to be imported would lead to an inevitable lack of certainty and satellite litigation.

The Claimant could not establish that the Defendant was aware of the mistake:

  • the offer was clearly expressed;
  • the Claimant was represented by experienced solicitors whom our insurer client would not expect to make such a fundamental mistake; and
  • the Claimant did benefit from the offer because it provided for payment of costs and disbursements.

As such the Defendant was entitled to conclude that the offer was intentional, and that the Claimant was happy to conclude the claim in this manner which also ensured he was not left out of pocket on costs.

The court therefore found in the Defendant's favour and struck out the Claimant's claim. In addition, QOCS was disapplied and we were awarded our costs of £5,875.80.

Neil Quinney, Senior Associate, and Matthew Wright, Litigation Executive, acted for the defendant