Part 36 Offers: Genuine attempt to settle?

Lee Silk looks at the recent decision in MVN (R on the application of) v London Borough of Greenwich High Court (Admin) 10 July 2015.

When Part 36 was reformed in April, one of the amendments was aimed at addressing “cynical Part 36 offers”. The court always had to consider a number of factors when deciding whether it is unjust to award the additional benefits under Part 36 but a new factor was introduced in CPR 36.17(5)(e): whether the offer was a genuine attempt to settle the claim. Although this issue has arisen in some pre-April decisions, we now have what we believe to be the first the High Court decision to consider the new provision.

The dispute concerned the claimant’s age and whether the claimant was a child. The claimant had made, what purported to be, a Part 36 offer on the basis that the defendant accept the claimant’s age and pay costs. The claimant was successful in the litigation, was awarded costs and beat the offer. However, the Judge considered that it would be unjust in the circumstances to order the usual Part 36 consequences which would be indemnity costs. The offer was not, in his opinion, a genuine offer of settlement. There was no element of concession or “give and take” on the claimant’s part; he was offering to take nothing short of what he was claiming in the proceedings. The fact that the defendant would have saved costs had it accepted the offer did not constitute a concession. As such, he regarded the offer “as something of a tactical ploy”.

Part 36 is always difficult in non-monetary cases. However, this case makes it clear that the courts expect to see some element of “give and take”. At the heart of the matter is what constitutes a “genuine offer” as opposed to a “tactical offer”. This is subjective and still, to a large degree, open to interpretation.