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Published 28 February 2023
At an application hearing on 14th February 2023 in the Newcastle County Court, DJ Dodsworth struck out the Claimant’s claim under CPR 3.4(2)(a), the judge concluding that damages were settled by the Defendant’s Part 36 offer dated 22nd December 2021.
The Claimant was also ordered to pay the Defendant’s costs of the proceedings, summarily assessed in the sum of £6,515.24.
The Claimant’s application for permission to appeal was refused.
The claim arose out of a minor road traffic accident in which liability for the accident was admitted at an early stage. The Claimant, a taxi driver, claimed for injury, the pre-accident value of his vehicle, recovery, storage, replacement plate and test fee as well as credit hire charges in excess of £45,000.
The Claimant instructed a legal representative to handle his injury claim, but the vehicle-related aspects of the claim were handled by a credit hire organisation and then their legal representative when proceedings were commenced.
Upon proceedings being issued by the credit hire organisation’s legal representatives, the Defendant made an application to strike out the claim for credit hire on the basis that the claim had already been compromised by way of Part 36, or pursuant to CPR 3.4(2)(b), because the proceedings were an abuse of process.
Compromise by way of Part 36
The provisions of the settlement were considered to ascertain whether there had been an agreement between the parties.
Pre-litigation Somerset Bridge Ltd acting on behalf of the Defendant’s insurer, Watford Insurance Company Europe Limited, had given notice in open correspondence to the Claimant’s credit hire organisation and legal representatives that any accepted offer for the whole claim would compromise all heads of loss. Following disclosure of the Claimant’s 1st medical report, Somerset Bridge made a Part 36 offer in the sum of £6,000 for the whole of the Claimant’s claim. This offer was accepted by the Claimant’s legal representatives. In their email accepting the offer, the Claimant’s legal representatives attached the 1st medical report fee, a physiotherapy invoice and the Claimant's excess payment receipt, to which Somerset Bridge replied that the Part 36 acceptance had compromised the whole claim.
The Defendant’s position was that in accepting the offer relating to ‘the whole of the Claimant’s claim’, the Claimant intended to settle all heads of loss including the credit hire claim as well as the injury claim (the pre-accident value having been paid at a very early stage). The Claimant’s representatives’ language was clear and they meant exactly what they said.
The Claimant argued that, whilst the accepted offer did state ‘the whole of the Claimant’s claim’, this must mean the whole of the injury claim only. Why else would documentation relating to excess and physiotherapy have been sent with the acceptance? This must have meant that acceptance was only in relation to the injury element of the claim.
DJ Dodsworth found that the Claimant’s argument could not be right. He stated that words carry their natural meaning, and it was not necessary to go beyond that. The claim was clearly compromised by the unequivocal acceptance of Defendant’s offer.
Even if the Judge had needed to look at the contextual documents to construe whether there had been compromise, in his view those supported the Defendant’s case. It was plain that the credit hire organisation and both legal representatives were aware of the credit hire claim. Attaching documentation to an acceptance of a Part 36 offer in which the whole of the claim had been settled was not sufficient to justify the Claimant’s position.
Lessons from this Judgment
For insurers and Defendant credit hire practitioners, the power of making Part 36 offers in higher value claims for the whole claim pre-litigation is acutely evident.
On the other hand, the danger for credit hire organisations is also evident, especially when claims are fragmented such as in this case with more than one legal representative being involved. Communication as well as collaboration is key to ensure potential recovery of significant heads of loss is not lost.
If you wish to discuss this further, please feel free to get in contact with our Vehicle Hire & Damage Team at DAC Beachcroft Claims Limited.
+44 (0) 121 698 5309
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