Houghton v P.B. Donoghue (Haulage & Plant Hire Ltd & Ors)

Permission to accept an unwithdrawn Part 36 offer after trial has begun is discretionary. A party who rejects an offer, proceeds with the trial and then changes position because the case appears to be going badly may face refusal of permission. The court must consider whether imposing the settlement on the reluctant offeror would be just. Saving court time and achieving settlement are relevant, but they do not ordinarily outweigh the unfairness of allowing a late change of position where the offeree has chosen to take the litigation risk. Permission is not impossible in such circumstances. The decision remains fact-sensitive, and the court may make a just costs order if permission is granted.

The claimant applied during an ongoing trial for permission to accept the defendant’s Part 36 offer of £330,000, made on 16 December 2016 and not withdrawn. The claimant had not accepted the offer before trial. After two effective days of trial, he reassessed his position and sought to accept the offer. The application concerned the operation of Part 36, including the requirement for permission under rule 36.11(3)(d) and the costs consequences under rule 36.13. The court considered earlier decisions under different versions of Part 36, including Capital Bank Plc v Stickland [2005] 1 WLR 3914, Sampla and others v Rushmoor Borough Council and another [2008] EWHC 2616 (TCC), and Nulty v v Milton Keynes BC [2012] EWHC 730 (QB).

1. The application for permission to accept the Part 36 offer was refused. The claimant had rejected the offer before trial, proceeded with the litigation, and then sought acceptance after forming the view that the trial was going less favourably than expected.

2. Under Part 36, the court has a discretion under rule 36.11(3)(d) to permit acceptance of an offer in the circumstances considered. The court may also make a costs order that it considers just under rule 36.13 if permission is granted.

3. The court was particularly persuaded by the reasoning in Sampla and others v Rushmoor Borough Council and another [2008] EWHC 2616 (TCC) and Nulty v v Milton Keynes BC [2012] EWHC 730 (QB). A change of attitude caused by seeing how the trial is progressing may constitute a change of circumstances making permission inappropriate.

4. The court must weigh the advantages of settlement and saving court time against the consequence of imposing a settlement on a defendant who no longer wishes to make it. Where the claimant has chosen to take the risk of trial and later repents because the case appears to be going badly, permission will often be refused.

5. The approach does not establish an absolute rule. Permission may be appropriate in other circumstances. On the facts presented, however, the just result was to refuse permission.