Application in Private

Under CPR Part 36, the court should hold an offeror to a Part 36 offer made during a trial unless a sufficient change of circumstances makes it unjust to do so. A change in the parties’ assessment of known evidence, the course of the trial, or a later first-instance judgment on different evidence will ordinarily be insufficient. The relevant change must be radical, such as genuinely new evidence giving the case a wholly different complexion or a binding change in legal outlook. Permission to accept an offer during trial and permission to withdraw it during the relevant period engage the same test. Permission may nevertheless be granted while costs are apportioned separately to prevent an offeree obtaining a costs free ride through late acceptance.

The court heard applications concerning Part 36 offers made by the defendants on 7 November 2016 in substantial competition litigation concerning multilateral interchange fees. The offers were made shortly before trial and the relevant period therefore continued until judgment in the liability phase. During the trial, the defendants purported to withdraw the offers, relying on the course of the evidence and a subsequent first-instance judgment in related litigation. The claimants sought permission to accept the offers under CPR 36.11(3)(d). The defendants sought permission to withdraw them under CPR 36.10(3). The central issues were whether the same changed-circumstances test applied to both applications and whether the alleged developments made acceptance unjust.

1. Applications granted and refused. The claimants were given permission to accept the Part 36 offers. The defendants were refused permission to withdraw them. Acceptance was treated as occurring on the judgment date.
2. CPR 36.10(3) applies indirectly where an offeree requires permission to accept an offer during a trial. Resistance to acceptance is the obverse of an application to withdraw an offer during the relevant period. The governing question is whether there has been a change of circumstances since the offer which makes it unjust to hold the offeror to its terms.
3. The required change must be substantial and significant. A mere change in the offeror’s subjective assessment of known evidence or prospects is insufficient. The relevant examples include genuinely new evidence which puts a wholly different complexion on the case, or a fundamental and binding change in legal outlook of the kind illustrated by Benham v Gambling. Such a legal change would ordinarily need to come from a higher court and determine a fundamental issue adversely to the claimant.
4. The defendants’ assessment of the evidence and the ebb and flow of the trial did not satisfy that test. The application was heard by a judge who had not heard the evidence and could not assess how the trial would ultimately be decided. The later judgment in Arcadia v MasterCard, [2017] EWHC 93 (Comm), was a first-instance decision on different evidence, issues and defendants. It was potentially persuasive but did not change the legal landscape or make acceptance unjust.
5. Part 36 is a structured and prescriptive procedural code intended to encourage settlement, save costs and court time, and promote certainty. The claimants were therefore entitled to accept the offers, but their late acceptance did not justify recovering all costs. They were awarded their action costs to 28 November 2016 and required to pay the defendants’ costs thereafter. The provisional view on the application costs was that the claimants should recover 50% on the standard basis.

First-instance decision. No appellate history is stated in the judgment.