Charles v NTL Group Ltd

A Part 36 offer is made when it is communicated in writing to, and received by, the offeree. Formal service under Part 6 is not required. Even if the method of communication technically fails to comply with Part 36, the court may give the offer the usual Part 36 consequences under CPR 36.1(2). The court should consider whether the method used affected the offeree’s interests or rights. Where it did not, it is ordinarily just to apply those consequences. Settlement offers must also be considered when exercising the general costs discretion under CPR 44.3.

The claimant recovered damages for a workplace injury in the Bournemouth County Court. Liability was admitted, and the dispute concerned quantum and costs. The defendant made a written Part 36 offer by fax more than 21 days before trial, followed by increased offers by telephone. The claimant’s solicitors received the fax but had indicated that they were not willing to accept service by fax. The district judge treated the offer as effective only when the hard copy arrived by document exchange, and declined to adjust costs in the defendant’s favour. The defendant appealed on the validity of the faxed offer and the court’s discretionary powers under Part 36 and CPR 44.3.

1. Appeal allowed. The costs order below was set aside and an order in the terms sought by the defendant was substituted.
2. A Part 36 offer differs from a Part 36 payment. Under CPR 36.8(1), an offer is made when received by the offeree. The rules do not require formal service under Part 6. It is sufficient that the offer is communicated in writing and received by the other party.
3. The wording of CPR 36.8 distinguishes an offer, which operates on receipt, from a payment into court, which requires written notice to be served. The Practice Direction’s reference to service of a Part 36 offer was collective and did not impose a formal service requirement absent from the rules.
4. Alternatively, if formal service had been required, CPR 36.1(2) empowered the court to give the offer the consequences specified in Part 36. The relevant question was whether the method of communication affected the claimant’s interests or rights. The fax had been received, no objection was taken at the time, and the claimant was in the same position as if the offer had been hand-delivered. The normal Part 36 consequences were therefore just.
5. The same conclusion followed from the general costs discretion under CPR 44.3. The court was required to take the settlement history into account, consistently with the overriding objective in CPR 1.2.

• Court of Appeal (Civil Division): Charles v NTL Group Ltd, [2002] EWCA Civ 2004. Appeal allowed; the county court costs order was replaced by an order in the terms sought by the defendant.
• Bournemouth County Court: District Judge Hurley awarded damages of £49,231.44 and ordered the defendant to pay 75% of the claimant’s costs.