Acceptance of Offers and Counter-Offers.
When a claim is brought for damages for injury, both parties need to be aware of the position with regard to acceptance or rejection of offers and counter-offers of compensation.
The party that is claimed against can make an offer under a procedure contained in Part 36 of the Civil Procedure Rules, but both sides need to appreciate that a recent case in the Court of Appeal has made it important you understand which offers can be accepted even if initially rejected.
‘Part 36 offers’ are designed to make it more likely that a case will be settled before coming to court. In the recent case, Gibbon v Manchester City Council, the Court of Appeal looked at the position in which a Part 36 counter-offer was made and rejected, but subsequently accepted.
The case involved a claim for an injury resulting from a fall. The Council responsible offered £1,150 in compensation, which was rejected. The claimant made a counter-offer, indicating that she would accept £2,500, which the council rejected. Later, the Council sought to accept the offer, which had not been withdrawn. The Court confirmed that in the absence of a formal withdrawal of the offer, it could still be accepted. This differs from the position in contract law, in which an offer, once rejected, ceases to have effect.
Christine Sands comments: “Getting the position right regarding Part 36 offers is important because if an offer is not accepted and the court subsequently rules that the sum payable to the claimant should be less than or equal to the Part 36 offer, the claimant will normally bear some of the costs of the action. On the other hand, if the settlement ordered by the court is more than the offer made, then it is the defendant who will be responsible for the costs.”