By Helen Mason

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Published 13 November 2023

Overview

In February, in our alert "Compromise strikes again by way of Part 36 offer & acceptance in the case of Norton v Fearn" we reported on the striking out with costs of a claim brought in respect of hire charges of £45,000 after a Part 36 offer in respect of the whole of the claimant's claim had been accepted.

The background

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 first medical report, Somerset Bridge Ltd made a Part 36 offer in the sum of £6,000 for the whole of the claimant’s claim and the offer was accepted by the claimant’s legal representatives. In their email accepting the offer, the claimant’s legal representatives attached the first medical report fee, a physiotherapy invoice and the claimant's excess payment receipt, to which Somerset Bridge Ltd replied that the Part 36 acceptance had compromised the whole claim.

The claimant, seeking to argue that the acceptance of the Part 36 offer had not compromised the credit hire claim commenced proceedings, the amount claimed being in excess of £45,000.00. It was this claim that was struck out.

The appeal

The claimant appealed the decision of District Judge Dodsworth.

The appeal was heard by His Honour Judge Freedman in the County Court in Newcastle-Upon-Tyne with Andrew Hogan representing the claimant and Martin Ferguson representing the defendant on instruction from DAC Beachcroft.

The judge, rolled the claimant's application for permission to appeal up with the substantive appeal and went on to consider the merits of the appeal, noting the role of an appellate court and that "the appeal hearing is a review, not a re-hearing". Two grounds of appeal were advance on behalf of the claimant, namely:

(i)   The judge construed the words of the compromise without identifying the relevant background matrix of fact;

(ii)  The judge failed to take into account the relevant factors in the background matrix of fact when construing the words of the compromise.

The issues

In response to the argument advanced on behalf of the claimant that DJ Dodsworth had erred in looking only at the words of the agreement without considering the factual context, HHJ Freedman stated "..it seems to me, the judge was perfectly entitled to look first at the plain words used by the defendant in making the offer; and to look at those words in isolation without having regard to the overall context." He continued:

"Moreover, it seems to me unarguable that when looking at the words used by the defendant, the meaning which was conveyed, and which it was intended to convey, was an offer in settlement of the entirety of the claimant’s claim. The words are plain and unambiguous. The judge was correct so to observe. If any clarification was required, such was evident from the content of the letters sent by the defendant’s agents in September and December: the reference to all heads of damage could not have been clearer and plainer."

The appeal judge also rejected the claimant's attempt to reargue that prior to Stage 2 of the MOJ Portal the compromise must have only related to personal injury because one firm of solicitors were pursuing the claimant’s personal injury claim, with his credit hire claim being pursued by separate agents. The judge confirmed what the judge below had recognised, that all agents acting on behalf of the claimant were aware of the other losses and the defendant had made it clear that any settlement would be for the entirety of the claimant’s claim. 

He noted that:

“… it is open to a defendant insurer, at any stage, to make an offer (whether Part 36 or otherwise) which covers all elements of the claim.”

The decision

Noting that "..the judge, having correctly construed the words as being plain and unambiguous, he was entitled to be reluctant to interfere with the plain meaning of the words when having regard to the overall context", HHJ Freedman went on to say that he was "quite satisfied that the judge did have regard to all of the matters which were ventilated in argument which, of course, were not confined to the documentation but included the factual context." HHJ Freedman concluded:

"I am entirely satisfied that the Judge did not fall into error in his interpretation of the wording of the agreement made pursuant to Part 36. He was fully entitled to conclude, both as a matter of law and fact, that acceptance of the offer compromised the entirety of the claimant’s claim.

It follows that I am satisfied that neither ground of appeal stands any real prospect of success. Accordingly, permission to appeal is refused."

Points to take away

The case amply demonstrates the value of making Part 36 offers but also illustrates the importance of being absolutely clear and unambiguous in what is being offered.

The approach of Somerset Bridge Ltd and the terms of its correspondence and Part 36 made clear beyond doubt what was being offered and did not merit any interpretation beyond the offer being in respect of the entirety of the claimant's claim – including the credit hire charges.

"This appeal outcome highlights once again the power of Part 36 offers made prior to litigation and confirms full and final definitely means full and final provided the terms of the offer are clear and unambiguous." Helen Mason, Head of Product, Credit Hire, DAC Beachcroft.

For more information or advice, please contact one of our experts in our Vehicle Hire & Damage Team.

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