PI Brief Update

An offer too good to ignore? ‘Intransigence’ proves a costly defence stragegy - Michael Brooks Reid, Temple Garden Chambers

20/10/25. Michael Brooks Reidcomments on the recent judgment of HHJ Russen KC inLearning Curve (NE) Group Ltd v Lewis & Anor[2025] EWHC 2491 (Comm), a case highlighting the uphill battle faced by a party arguing that it would be unjust for the usual Part 36 consequences to apply.

The Offer

Following trial, the Claimant was awarded £5.2m. The critical factor in this consequential hearing was a Part 36 offer made by the Claimant over a year before trial. The offer was for the precise sum ultimately awarded by the Court, inviting settlement at £5,211,625. The Defendants chose not to engage with the offer, pursuing a 'die-hard' defence and a counterclaim, which ultimately failed.

The Arguments

The Claimant sought to invoke the Part 36 sanctions under CPR 36.17. The Defendants resisted, arguing the offer was ambiguous as it was silent on whether it was in addition to a sum they had already paid on account. They contended it would be unjust to impose the penalties, pointing also to the Claimant’s initially higher pleaded claim as evidence of a shifting case that made the offer’s value impossible to assess.

The Decision

HHJ Russen KC rejected the Defendants’ arguments and enforced the full force of the Part 36 regime. The Judge found the offer was clear and effective; the silence on the earlier payment did not create ambiguity, as the offer was to settle the entire proceedings, including the counterclaim for the return of that sum. The Judge noted the Defendants’ failure to seek clarification at the time – a process specifically provided for under Part 36.

The Court held there was nothing unjust in the outcome. The Defendants had been given a clear opportunity to settle for the correct value of the claim and had instead chosen to incur substantial further costs obtaining a judgment that mirrored the offer. The Claimant’s initial higher valuation was irrelevant; the key was that the offer accurately reflected the claim’s true worth.

Consequently, the Court ordered interest at 8% over base rate, indemnity costs from the date of expiry of the offer as well as an additional £75,000 payment under CPR 36.17(4)(d).

Comment

This judgment is a reminder of the potential peril of a well-judged Part 36 offer. In applying the provisions of Part 36, courts will not readily rescue litigants from the arguably harsh consequences of their tactical decisions, even in cases of a very ‘close call’ such as this. Whilst this may appear harsh, one has to remember that Part 36 is harsh by design – a ‘carrot and a stick’ to encourage settlement. Any offeree arguing that it would be unjust to apply the ‘stick’ provisions after the event will inevitably face an uphill battle, given the Court’s cognisance of the broader aims of the regime.

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