Part 36 Offers: Liability Encapsulates Causation

In Seabrook v Adam [2021] EWCA Civ 382, the Court of Appeal held that a Claimant’s Part 36 offers to accept a ‘discounted’ 90% of his claim for damages to be assessed were not effective when causation was successfully challenged.

The full judgment is available here.

The claim arose out of a road traffic collision in which the Claimant asserted that he had sustained two distinct injuries as a result of the accident, (i) a neck injury and (ii) an injury to his lower back.  He claimed damages in the region of £10,000.

Whilst primary liability had been accepted by the Defendant, causation remained in dispute.

The Claimant made two Part 36 Offers, in similar terms, in which he offered to accept 90% of his damages to be assessed, conditional on the basis that liability was admitted.

The offers were not accepted and at trial it was found that the Defendant’s negligence had caused only the neck injury and that causation was not proven in respect of the back injury. Damages were awarded in the sum of £1,574.50. 

At a subsequent hearing dealing with the issue of costs, the Claimant argued that he had bettered his own Part 36 offers because he had recovered 100% of the damages which were awarded. The District Judge rejected this argument holding that they were not genuine offers to settle and awarded the Claimant fixed costs in the usual way. 

The Claimant unsuccessfully appealed. HHJ Walden-Smith held that in fact it was the Defendant who had bettered the offers, since liability was made out in only one of the two alleged injuries. Further, she stated that Part 36 was:

“not designed to deny any realistic possibility of a party arguing fundamental principles with regard to liability.  That would be an affront to the right to a fair trial.  A Defendant would be placed in an impossible situation of being required to accept an offer because, inevitably, they are never going to better a discount because whatever damages are awarded, those damages will also be 100% and any discount will always be more favourable.” 

The matter proceeded to the Court of Appeal where the appeal was again dismissed. Asplin LJ agreed with the analysis of HHJ Walden-Smith and further held that:

• the real question was one of construction of the Claimant’s Part 36 offers;
• they must be interpreted in light of the pleadings and the issues which remain live;
• with that in mind, the ‘reasonable reader’ would have understood the Claimant’s offers to be addressing both liability and causation;
• had the Defendant accepted the offers, he would have admitted liability for both the neck and the back injuries and would not have been able to argue that he had not caused the back injury at all; and
• as the Defendant was only found liable in relation to the neck injury, he bettered both the Claimant’s Part 36 offers and the Claimant was not entitled to the advantages of CPR 36.17.

The Court of Appeal gave some useful advice to avoid similar disputes arising:

• cases of this kind turn, inevitably, on the precise wording of the pleadings and the specific terms of the Part 36 offer;
• it is important to express whether the offer relates to the whole claim or part of it and/or state the precise issue to which it relates, in accordance with CPR 36.5(1)(d); and
• if the issue to be settled is “liability”, it would be sensible to make clear whether the Defendant is being invited only to admit a breach of duty, or what damage the Defendant is being invited to accept was caused by the breach of duty.