Scammell v Dicker

Under Civil Procedure Rules Part 36 as then framed, an offer expressed to remain open for 21 days was not thereby made irrevocable. Part 36 prescribed the form of offers and the procedural consequences of making, accepting or withdrawing them. It did not exclude the ordinary contractual rule that an unaccepted offer may be withdrawn.

The express requirement for permission to withdraw a Part 36 payment, contrasted with the absence of such a requirement for an offer, confirmed that an offer could be withdrawn before acceptance. A purported acceptance after effective withdrawal could not compromise the action.

Neighbouring landowners were in dispute over a 1994 consent order which had compromised earlier boundary litigation. In later proceedings, the claimants sought to set aside that order on the ground of mutual mistake.

Shortly before trial, the defendant made a Part 36 offer. Although it stated that it was open for 21 days, she withdrew it before the claimants purported to accept it. His Honour Judge Thompson QC, sitting in Poole County Court, held that the offer could not be withdrawn during that period and declared that the action had been compromised.

The defendant appealed. The central issue was whether a Part 36 offer, expressed to remain open for 21 days, could nevertheless be unilaterally withdrawn before acceptance.

1. Appeal allowed. Lord Justice Aldous held, with whom Lord Justice Mance agreed, that the defendant’s Part 36 offer had been effectively withdrawn before any acceptance. The later letter from the claimants could therefore not compromise the action.

2. Part 36 did not prevent withdrawal of an unaccepted offer. Rule 36.5(6) required an offer made at least 21 days before trial to be expressed to remain open for 21 days. That wording prescribed the form of the offer; it did not require the offer actually to remain open or add an irrevocability term by implication.

3. The construction was supported by the structure of Civil Procedure Rules Part 36. Rule 36.5(8) expressly contemplated withdrawal and imposed no temporal restriction, although withdrawal removed the Part 36 consequences. Rule 36.6(5), by contrast, expressly required the court’s permission to withdraw a Part 36 payment. Rule 36.5(7) did not prescribe any period for offers made less than 21 days before trial, and a judicially implied reasonable period would create uncertainty.

4. Part 36 regulated the requirements and consequences of settlement offers. It did not displace the ordinary law of contract governing withdrawal before acceptance. The judge below had therefore erred in declaring the action settled. The declaration and consequential provisions of his order were set aside, with costs awarded to the appellant.

5. Aldous LJ declined to determine the consequences of rejection of a Part 36 offer. He observed that correspondence should be construed cautiously before treating it as a rejection, in light of rule 36.9, which permitted clarification of a Part 36 offer.

• Court of Appeal (Civil Division): Allowed the defendant’s appeal and set aside the declaration that the action had been compromised: [2000] EWCA Civ 352.

• Poole County Court: His Honour Judge Thompson QC held on 20 March 2000 that the Part 36 offer could not be withdrawn and declared that the action had been compromised.