Momonakaya v the Ministry of Defence

A Part 36 offer may remain effective despite a formal or technical defect where the defect causes no real uncertainty or prejudice and is properly treated as de minimis. Acceptance by a solicitor acting on the claimant’s instructions concludes the settlement; a later change of mind does not undo it. Alleged pressure from the solicitor’s advice will not amount to duress without satisfying the high threshold required for that defence. Where the usual Part 36 costs consequences would be unjust because material information was unavailable during the relevant period, the court may extend the period before costs shift.

The Ministry of Defence made a Part 36 offer of a lump sum, subject to deductions under the Social Security (Recovery of Benefits) Act 1997. The claimant did not accept it within the initial twenty-one-day period. After his solicitors resumed acting, they unequivocally communicated acceptance on his instructions.

The defendant argued that the proceedings were automatically stayed under Part 36 and that the usual costs consequences followed. The claimant later sought to withdraw acceptance, disputing the settlement and alleging pressure. The court determined whether the offer and acceptance created a binding settlement, whether the technical non-compliance concerning the compensation recovery unit certificate prevented Part 36 applying, and what costs order was just.

1. Settlement. The solicitor who communicated acceptance on 8 November 2018 was acting on the claimant’s instructions and accepted the Part 36 offer in clear terms. The claimant’s subsequent change of mind could not revoke that acceptance.
2. Duress. The claimant’s difficulties and dissatisfaction with the advice received did not approach the very high threshold required to establish that the acceptance was made under duress.
3. Part 36 compliance. The defendant had not complied with Civil Procedure Rules 1998, r.36.22(7), by clarifying the offer within seven days of receiving the compensation recovery unit certificate. The court nevertheless treated the defect as de minimis. The parties understood the deductions, the figures had not changed, and no prejudice or uncertainty resulted. The strict-compliance observations in F&C Alternative Investment (Holdings) Ltd v Barthelemy (Costs) (2012) did not prevent that conclusion.
4. The Part 36 offer was therefore effective and the proceedings were stayed under r.36.14. Alternatively, the correspondence created a binding common-law compromise by offer and acceptance.
5. Costs. Although the ordinary costs consequences under r.36.13(5) would ordinarily apply from 21 May 2018, it would be unjust to impose them then. The information needed properly to evaluate the offer, particularly the joint expert report, was not available during the initial twenty-one-day period. The reasonable evaluation period was extended to 21 September 2018.
6. The defendant was ordered to pay the claimant’s costs to 21 September 2018. The claimant was ordered to pay the defendant’s costs from 21 September to 8 November 2018, subject to detailed assessment and set-off against damages, together with £2,500 for the hearing. The defendant was also ordered to pay £100,000 on account of costs, with the net settlement sum calculated at £38,839.61.