Reference to Part 36 offers at CCMC’s. What is the position?

The provisions of CPR 36.16 (2) specifically state that:

‘The fact that a Part 36 offer has been made and the terms of such offer must not be communicated to the trial judge until the case has been decided’.

There are a small number of exceptions to this rule, which are listed in CPR 36.16 (3), but what is not explicitly dealt with, is the position as to whether offers can be disclosed to an interlocutory judge.

Barring an agreement to make reference to any offers pursuant to CPR 36.16 (3) (C), a party wishing to make reference to an offer may therefore be forced to make an application to rely on such information. This was the position and point of principle discussed in the recent case of FKJ v RVT & Ors [2022] EWHC 411 (QB). Here, the Honourable Mrs Justice Collins Rice heard an appeal from an earlier decision by Senior Master Fontaine, who had rejected such an application.

In the grounds for their appeal, the Appellant’s relied heavily on the reference to ‘trial judge’ within the construction of CPR 36.16, to suggest that the bar on the communication of offers did not extend when the judge overseeing preliminary issues or case management would not be presiding over the final hearing. Although in submissions, the Appellant had acknowledged that whilst there was no unqualified entitlement to refer to such offers, even where it was known that the judge hearing preliminary issues was not the trial judge.

Support was gathered in these submissions from White Book commentary on Rule 36.16, which includes the following:

Interim Hearings – As stated in r.36.16(2), the general rule restricts disclosure to the ‘trial judge’ and it has long since been understood that it does not prevent disclosure to a judge dealing with interim matters in the course of which it may be both necessary and desirable for the judge to know of offers made (Williams v Boag [1941] 1 KB 1, CA). Nowadays, of course, parties and their solicitors should be aware of the need for different approaches to references to offers depending on whether the judge conducting the CMC [case management conference] or other interim hearing is, or could be, the trial judge. This is of particular importance where the designated civil judge is conducting the pre-trial proceedings or in specialist courts where case management is undertaken by judges rather than masters or district judges.

Mrs Justice Collins was not swayed by this reference, on the basis that the decision in Williams v Boag preceded the provisions of Part 36 by a number of years. She was also not convinced that further authorities relied upon, provided sufficient assistance to overturn the initial decision and satisfy the criteria required by CPR 52.

Subsequently Mrs Justice Collins determined that, ‘authorities … cited … provide limited assistance, analogous at best. Unless there are clearer authorities …, I am inclined to agree that the question of principle remains outstanding, however surprisingly. In an appropriate case, it may be necessary to resolve that question definitively one way or the other. I do not, however, consider the present appeal to be that case, …’.

It appears to be therefore, that unless the rules committee or another authority clarify the position, the most sensible course of action would be for a party wishing to rely on an offer during the budgeting or case management process to make an application to the Court, absent any agreement, and seek to sway their view based on the facts of the case.

Whilst at most CCMC’s there may be no need at all to refer to Part 36 proposals, it can be envisaged that they may be useful when a party seeks to hang their hat on the ‘sums in issue’ limb of the proportionality criteria, when attempting to sway the Court that the budgeted sums claimed are proportionate or disproportionate.

There are of course several factors which determine whether legal costs are proportionate, in this writer’s experience the factor which seemingly plays the biggest role in setting an appropriate costs budget, is the level of the costs budget in comparison to the claim value. Parties wishing to take this approach should therefore proceed with caution until there is further commentary on the issues.

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