Gibbon v Manchester City Council

Part 36 is a self-contained procedural code. Common-law rules of offer and acceptance do not apply unless the Rules clearly provide for them. A Part 36 offer remains capable of acceptance despite rejection, and despite a later different offer, until it is withdrawn by express written notice.

When assessing whether a judgment is more advantageous than a Part 36 offer, the court may consider all relevant circumstances. Financial success will ordinarily govern. Non-financial disadvantage, unrecoverable costs and stress will displace that conclusion only in rare cases where the monetary gain is very small and compelling evidence justifies doing so.

The court heard two appeals together concerning the operation of Part 36 of the Civil Procedure Rules.

In Gibbon v Manchester City Council, the claimant made a Part 36 offer to accept £2,500. Although the council had previously rejected it, the offer was not formally withdrawn. The council later accepted it. The District Judge entered judgment for the claimant, and His Honour Judge Holman dismissed her appeal.

In the conjoined appeal, L G Blower Specialist Bricklayer Ltd v Reeves, the defendants relied on earlier Part 36 offers when challenging a costs order after judgment for the claimant. His Honour Judge Rubery had dismissed their appeal from the District Judge’s costs order.

The central issues were whether Part 36 imports common-law rules on rejection, revocation and supersession of offers, and how the court assesses whether a judgment is more advantageous than an offer.

1. Both appeals were dismissed. Per Moore-Bick LJ, whose reasons were agreed by Carnwath LJ and the President of the Queen’s Bench Division, Part 36 of the Civil Procedure Rules is a carefully prescribed and self-contained code. Although basic concepts of offer and acceptance underpin it, technical common-law rules are not imported unless the Rules clearly require that result.

2. In Mrs Gibbon’s appeal, rule 36.9(2) expressly permitted acceptance at any time unless the offeror served notice of withdrawal. Rejection by the offeree did not cause the offer to lapse. Rule 36.3(7) required an express written notice which made clear that the identified offer was withdrawn. The claimant’s solicitors’ letter rejecting the council’s own offer did not refer to her Part 36 offer and could not amount to an implied withdrawal. The council therefore validly accepted the outstanding offer.

3. In the conjoined appeal, the February communication did not expressly withdraw the earlier May offer and did not comply with rule 36.2(2)(b) or (c). It was therefore not a Part 36 offer and did not supersede the May offer. Moore-Bick LJ also expressed the obiter view that several Part 36 offers may remain concurrently open unless one is clearly varied or withdrawn in accordance with the Rules.

4. For rule 36.14(1)(a), the court must compare the offer with the judgment, taking account of interest and all relevant circumstances. Following Carver v BAA Plc [2008] EWCA Civ 412, non-financial matters may be relevant. However, monetary recovery will normally be decisive. Here the claimant recovered materially more than even the enhanced May offer, and there was no evidence of unrecoverable costs or other disadvantage capable of outweighing that financial success.

5. Costs consequently fell within the Part 44 discretion. The District Judge had properly balanced the claimant’s early conduct against the defendants’ later decision to contest the whole claim. His order was within the generous ambit of that discretion.

• Court of Appeal (Civil Division): Both the appeal by Mrs Gibbon and the conjoined appeal by Mr and Mrs Reeves were dismissed.
• Manchester County Court: His Honour Judge Holman dismissed Mrs Gibbon’s appeal from District Judge Richmond, who had entered judgment for her following the council’s acceptance of her Part 36 offer.
• Shrewsbury County Court: His Honour Judge Rubery dismissed Mr and Mrs Reeves’ appeal from District Judge Brown’s costs order following judgment for the building contractor.