Part 36 Offer To Settle "The Whole Of The Claim" Did Not Include Claims Set Out In Draft Amended Pleadings

• Jurisdiction: European Union
• Law Firm: Herbert Smith Freehills
• Subject Matter: Litigation, Mediation & Arbitration, Privacy, Data Protection, Trials & Appeals & Compensation
• Author: Ms Anna Pertoldi and Maura McIntosh
• Published date: 16 March 2023

In a recent Court of Appeal decision, a defendant's Part 36 offer to settle "the whole of the claim" (which the claimant had accepted) was construed as relating only to the pleaded claims and not the additional claims set out in the claimant's draft amended particulars of claim. However, the claimant could not bring new proceedings raising those additional claims: to do so would be an abuse of process under the so-called Henderson abuse principle, as the additional claims could and should have been raised, if at all, in the earlier action: Warburton v The Chief Constable of Avon and Somerset Constabulary [2023] EWCA Civ 209.

The decision highlights a potential trap for the unwary, as a party might assume that claims put forward in a draft amended pleading will be encompassed in a settlement resulting from the acceptance of a Part 36 offer to settle the whole of the claim. The current decision suggests that this will not be the case, applying the reasoning in Hertel v Saunders [2018] EWCA Civ 1831 (considered here) in which the Court of Appeal held that an offer relating to a proposed claim by amendment was not a valid Part 36 offer.

It is not clear, however, whether the court in the present case was referred to the subsequent decision in Calonne Construction Ltd v Dawnus Southern Ltd [2019] EWCA Civ 754 (considered here), which distinguished Hertel in finding that an offer to settle both the claim and an unpleaded counterclaim was a valid Part 36 offer - or whether that decision would have affected the court's conclusion on the construction of the Part 36 offer in this case. In light of the uncertainties, parties making or accepting Part 36 offers should ensure it is clear whether any claims which have been referred to but not yet pleaded are covered by the offer.

The decision is also of interest in applying the Henderson abuse principle to prevent a party bringing a claim that it had "raised" in earlier proceedings, in the sense of including it in draft amended particulars, but had not formally pleaded in that action. The Court of Appeal rejected the argument that the Henderson abuse principle excludes claims that were "raised but not brought" in this sense. The decision also shows that, where the earlier proceedings were settled, the court will consider the pre-settlement correspondence in considering whether there is an abuse, despite such correspondence being generally inadmissible under the "without prejudice" rule.

Background

The claimant brought...