Not every settlement proposal is made by Part 36. In fact, if one is in the small claims track then Part 36 is not open to them.
I was recently instructed on a matter where a claim was brought against an RTA insurer in respect of a road traffic accident. Liability had been admitted but quantum and causation was disputed in respect of the Claimant’s insurer outlay.
It became clear to the Claimant’s Solicitors that, upon further investigation, the outlay was not just vehicle repair costs, but the Claimant’s excess and hire. This was more than just problematic for the Claimant because CPR PD 16 para 6.3 required the Claimant so plead particular characteristics of the hire.
With instructions the Claimant’s Solicitors put the Defendant’s Solicitors on notice that an amendment was required but that they were willing to settle for a lower amount to avoid the costs. The Defendant’s Solicitors advised that as excess and hire had not been pleaded, they could not agree to them. They sought their wasted costs should the Claimant intend to make an application to amend their pleadings.
Months later, once the Court approved the consent Order, the Defendant’s Solicitors communicated acceptance of the Claimant’s offer.
Cue the dispute.
The offer
The offer made by the Claimant was as follows:-
Thank you for your agreement, we have now received instruction in regards to the offer put forward.
We note that the offer is in full for the repairs and S+R, however does not include an amount for the hire invoice or excess provided.
Unfortunately the hire claim had not been broken down within our instructions and so this is now pleaded [in]correct on our claim form so we would need to apply for this to be amended.
To avoid any further costs and work being carried out, we ask that the excess of £350.00 is included along with hire in the sum of £1296.00.
This would make a payment in relation to damages in the sum of £9166.45 plus small claims costs in order to bring this one to a close today.
Please confirm that this sum can be agreed so we may notify the Courts of settlement. We look forward to hearing from you.
It was the Claimant’s contention that the ‘to avoid any further costs and work‘ was the contingency that the offer was being made to avoid the cost of the amendment.
The Defendant’s response
The Defendant’s Solicitors responded within 15 minutes with the following:-
I cannot agree your excess or hire (direct or credit hire) as it is not pleaded or included in proceedings.
If you want to include hire and excess, please look to amend your proceedings/statement of case to
include the same. We can do this via consent but would require £250.00 + VAT in our wasted costs noting that an updated defence will need to be filed. We are also quite far into the court process before you made us aware of your error – changing the pleadings will effectively put the claim back to the start of the Court process and mean more time will need to be spent on the file.
The Claimant was of the view that the Defendant was not going to accept the offer. It made the application to amend and a consent was endorsed by both parties’ Solicitors for the Defendant’s costs of the amendments to be agreed.
A direction of the consent Order was for a case management conference to be listed to deal with directions (as specific directions would be needed in relation to credit hire). As the parties disputed as to whether the claim was compromised or not, the CMC became the battleground.
Submissions
I submitted that there had been no settlement either because the contingency was that the Claimant did not incur the further costs alluded to (i.e. the amendments to the pleadings) or the Defendant had expressly rejected the offer or by conduct by compelling the Claimant to amend its pleadings.
I had accepted that the offer could have been better particularised but it was still quite clear there was a contingency.
The Defendant submitted that there had been no direct rejection of the offer and that until the claim was amended to expressly plead excess and hire, there had never been the option for a claim for the excess and hire to form part of a settlement. The Defendant said that there was no time limit, no withdrawal and once the proceedings were amended it was open to the Defendant the same.
Judgment
The Judge sided with the Claimant. The Judge considered what the Claimant had said in its offer and concluded:-
Seems to me looking at that [offer], what the Claimants were doing was recognising the pleadings were deficient but saying that the deficiency was the failure to specify the excess and hire and that in order to proceed this would need particularised The set out in the email their position and then made an offer to accept the figure put forward in settlement and that offer was premised by avoiding further costs in relation to an amendment
The Judge then turned to the response of the Defendant and said:-
I read this to mean the Defendant saying “we are not willing to deal with the matter. You’ve indicated a wiliness to accept a sum to avoid incurring further costs but we are not prepared to deal with the claim in this manner and your offer is therefore rejected“. The rejection of this offer compelled the Claimant to take procedural steps to remedy the proceeding and that offer was no longer open for acceptance
Consequently the Judge found that the Defendant had expressly rejected the offer.
Commentary
Although I had some confidence that the Claimant would prevail, there was still an element of doubt. The wording of the email most certainly read to me as a contingency of avoiding the application, but one has to be very careful how offers are worded.
If one needs to, an offer could set out the terms in bullet points. For example the Claimant could have said the following:-
The Claimant puts forward the following terms:-
- The Claimant does not have to apply to amend the Particulars of Claim
- The Claimant will accept £9,166.45 in full and final settlement of all heads of loss arising out of the accident dated [insert date] including excess and cost of hire
- The Defendant will pay the Claimant’s small claims fixed costs in accordance with CRP 27.14
- This offer will automatically be withdrawn if the Claimant makes an application to amend the Particulars of Claim
This would have avoided any doubt that once the Defendant compelled the Claimant to make the application the offer would no longer be available for acceptance.
The Defendant, in this circumstance, may have been better off staying silent and not responding to the offer. Either the Claimant would have proceeded to the final hearing without amending its Particulars and be debarred from claiming the two heads of loss. Alternatively the Claimant would have made the application, no express rejection was made and then the Defendant would have been in a stronger position to argue the offer was still open for acceptance.
Although the Judge did not consider it, I still think the Defendant would have been in trouble as the Claimant’s offer still read on the basis that it was being made on the contingency an application or further work was not incurred.
Information
AJH Advocacy Limited, a Limited Company which is regulated by the Bar Standards Boards (entity number 190758), ceases trading on the 12th January 2026.
From the 12th January 2026 and onwards, Alec Hancock will practice as a Barrister at Magdalen Chambers in Exeter. For instructions on matters on or after 12th January 2026, please contact Magdalen Chambers via clerks@magdalenchambers.co.uk or by telephone on 01392 285 200.