Thewlis v Groupama Insurance Co Ltd [2012] EWHC 3 (TCC): costs, costs and more costs

The Court likes it when parties settle; Part 36 of the Civil Procedure Rules sets out a great way for parties to make offers, with swingeing penalties for anyone who does not accept a reasonable solution.

Trouble is Part 36 has spawned plenty of litigation, with even more costs...

You would think it would be simple common sense, but no, when lawyers get involved common sense gets thrown out of the window and it's up to judges to put it back together again.  E.g. stating that you can't accept an offer if your case has been slung out.  Or working out what happens if your offer is exactly right, or you hide a big chunk of claim till the last minute.

In Thewlis the question was whether an offer had been accepted.  If it had, end of case; if not, it continued.  At least the parties had got sufficiently close to work out that an offer to settle had been made in 2008 and someone had tried to accept it in 2011.  Question was whether they could. Under a contractual regime it would have been simple - three years is far too long to wait to accept an offer, nobody would have thought the offer was still out there - but Part 36 is statutory and different rules apply.  Could an offer made in 2008, and expressed to be open for 21 days, still be open in 2011?

The problem was that the offer did not comply fully with the provisions of Part 36 - the offer letter said that it could only be accepted after 22 days or later if either the costs are agreed or the Court gives permission.  The Court had previously held that any ambiguity should be dealt with by reading the letter as according with Part 36 as far as it could, so that little provision - which was kicked out of the Part 36 regime by a revision to Part 36 not long before the offer letter was sent, which meant that costs would be automatic, rather than agreed - should be read accordingly. 

The Court refused to do so, in a tortuous attempt to say that, if a letter says "Part 36" in it and then contradicts Part 36, it cannot be a Part 36 offer.  Essentially saying that the solicitor writing the letter misquoting the provisions of the part had taken it outside the part - even though he was doing his damnedest to get it within the part and the solicitors on the other side had not taken the point.

To my mind this is an extremely tenuous ruling and one that does not help the position at all; a Part 36 offer is an offer subject to Part 36 and the somewhat loose wording can easily be read to mean that it was still a Part 36 offer.  After all, if the parties did not agree on the costs following, because there was a dispute over the amount (say), the Court would rule in accordance with Part 36.

More to the point, and conspicuously absent from the judgment, is Rule 1.  Effectively "justice must be done".  We have a Part 36 offer, never withdrawn, always on the table, that the Court decides, 3 years later, when the offeror is not keen on it, is not a Part 36 offer.  Is that really just?