PI Brief Update

The Common Law Doctrine of Mistake & Part 36 Offers: O’Grady v B15 Group Ltd [2022] EWHC 67 (QB) - Nicholas Dobbs, Temple Garden Chambers

17/02/22. In O’Grady v B15 Group Ltd,[1] by way of background, the Claimant's husband had been killed following a collision with a lorry, driven by an employee of the Defendant. Prior to the issue of proceedings, the Defendant's solicitors put forward a Part 36 offer whereby they offered to apportion liability on the basis of a 60/40 split in favour of the Claimant. At that stage the Defendant had not made any formal admission in relation to primary liability. The Claimant did not accept this offer, but neither was it withdrawn. Subsequently, before the claim was issued, the Defendant conceded primary liability but made clear that contributory negligence remained in dispute. After the claim was issued, the Claimant's solicitor put forward a Part 36:

The Claimant offers to resolve the issue of liability of on 80/20 basis. For the avoidance of doubt if the Defendant accepts this offer it will only be required to pay 20& of the Claimant's damages.

The Defendant's solicitor accepted the offer and the Claimant’s solicitor replied soon after that the offer he intended to make was 80/20 in the Claimant's favour. The Claimant issued an application for permission to withdraw the offer or to change its terms under CPR 36.10(2)(b). The High Court was accordingly asked to consider whether a mistake in the formulation of a Part 36 Offer and known to be a mistake by the recipient, should prevent that offer from constituting an effective and binding Part 36 offer. The Defendant argued that Part 36 was a self-contained code and that there was no basis within it, or otherwise within the CPR or relevant case law, to import the doctrine of mistake. The Court held that the doctrine of mistake did apply:[2]

I am satisfied that the doctrine of common law mistake can apply to a Part 36 offer in circumstances where a clear and obvious mistake has been made and this is appreciated by the Part 36 offeree at the point of acceptance. Authority is entirely in support with the application of the doctrine. Nothing about Part 36 being a self-contained code excludes it. On the particular facts of this case, it is entirely compatible with a procedural code that is intended to have clear and binding effect but not at the expense of obvious injustice and the Overriding Objective still has application.

On the facts of this case, I agree with the Claimant's submission that the Overriding Objective is entirely consistent with the merits of her Application and it should be granted. Conversely, the Overriding Objective provides little support for the Defendant's position once mistake is accepted as in issue. Indeed, it is difficult to think how the Overriding Objective would support the Defendant's position at all. Plainly, "saving expense" [r.1.1(2)(b)] does not have as its primary aim the substantial reduction of a party's liability for damages owing to the mistake of another "of a kind which in law would render the agreement void".