Evans v Royal Wolverhampton Hospitals NHS Foundation Trust
Evans v Royal Wolverhampton Hospitals NHS Foundation Trust (2014) saw the Defendant attempting to withdraw a Part 36 offer whilst the 21 day period for acceptance was still running and the case provides some useful pointers to parties in a similar position.
The case concerned injuries which were sustained by the Claimant on account of the Defendant’s negligent clinical treatment. On 3 July 2014, the Defendant made a Part 36 Offer of £325,000. The offer referred to various provisions of Part 36, and also specifically stated:-
“This offer can only be withdrawn or altered to be less advantageous to the Claimant before [that time] with the permission of the Court.”
It is well established by CPR r.36.3(5) that a Part 36 Offer can be withdrawn before expiry of the relevant period (not less than 21 days) only if the Court gives permission.
On 23 July 2014 at 11.25 a.m. the Defendant’s Solicitors served a Notice of Withdrawal upon the Claimant’s Solicitors by fax. At 12.45 p.m. on the same day, the Claimant’s Solicitors served a Notice of Acceptance by fax upon the Claimant’s Solicitors.
The Claimant’s Solicitors then relied upon CPR r.36.11(6) and (7) which provides that in the event of acceptance of a Part 36 Offer, the Defendant must pay the relevant sum within 14 days, failing which the offeree may enter judgment for the unpaid sum. In the absence of any response, on 6 August 2014 the Claimant applied for a declaration that the proceedings had been settled in the sum of £325,000, as well as applying for judgment.
In fact, in the intervening period, the Defendant on 24 July 2014 had issued a without notice application seeking permission to withdraw its Part 36 Offer. The application was heard on 7 August 2014 (without the Claimant being present) and the Court ordered that:-
The Defendant was permitted to withdraw its Part 36 Offer.
The Claimant’s purported acceptance of the Part 36 Offer was ineffective.
The usual requirement for the Claimant to be served with a copy of the without notice application and supporting evidence was to be dispensed with.
The Claimant subsequently received a copy of the Order and promptly issued an application to have it set aside, as well as seeking an order for disclosure of the Defendant’s application notice and supporting evidence.
Interestingly, the Judge presiding over the Claimant’s application (Leggatt J) had not seen the Defendant’s application notice or supporting evidence. He did not, therefore, know the basis for the Defendant’s application to withdraw the Part 36 Offer. The only information available was that there had been a “change of circumstances”.
At the application, Counsel for the Defendant accepted that the application notice and supporting evidence would have to be disclosed to the Claimant, but he sought an adjournment of the Claimant’s application for an unspecified period. He argued that there were good reasons why the Claimant should not see the evidence at that stage, but said that she would be able to see it at some point in the future.
The Claimant argued that the application to adjourn was one which would delay the administration of justice and would cause her real prejudice by keeping her out of funds.
Hearing the Claimant’s application Leggatt J held that:
It was wrong in principle for the Defendant to make its application for permission to withdraw its Part 36 offer without notice to the Claimant and it was wrong for the court to entertain that application. This was not a case where the Claimant could ever have defeated the application before it was heard.
Consequently, the ex-parte order for leave to withdraw the Part 36 offer would be set aside
It would be unlawful and improper for the court to receive evidence or argument in support of a request for an adjournment without the Claimant knowing what the arguments were against the application and what the evidence was..
It was open to the Defendant to renew his application to withdraw the Part 36 offer, but on the basis that it is supported by evidence, and on the basis that the Claimant was afforded the opportunity to respond. In the present case, the Defendant had not disclosed any such evidence to the Claimant and consequently the Claimant’s acceptance of the Part 36 offer was deemed effective and it followed that she was entitled to judgment for the accepted sum.
The difficulties experienced by the Defendant in Evans serve to highlight the importance of getting the Part 36 strategy right at the outset and whilst this was described by Leggatt J as a “remarkable case” and it is safe to say that the facts are fairly unique, two potentially significant practice points arise:-
Where a party attempts to withdraw a Part 36 offer before the relevant 21 day period has expired, there must be a sufficient change of circumstances, and information relating to the change must be disclosed when notice of withdrawal is given and/or when the application for permission to withdraw the offer is made.
A without notice application can only be justified if the party who is not notified of the application has the right to apply to the court to set aside or vary the order pursuant to CPR 23.9(3) and 23.10.
This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.