Sheriff rules pursuer’s settlement offer in personal injury case can be impliedly withdrawn

Sheriff Court
Sheriff Court

The defender in a personal injury case who sought decree that a settlement offer by the pursuer could not be withdrawn impliedly even in a change of material circumstances has had its motion refused by the All-Scotland Sheriff Personal Injury Court in Edinburgh.

The pursuer, Maxwell Davidson, intimated by email to the court, with the defender, Clyde Training Solutions Ltd, cc’d in, that the offer was withdrawn due to a change in material circumstances. No formal notice of withdrawal was made.

The motion was heard by Sheriff K McGowan.

Application of the common law

 The offer in question was emailed to the defenders’ agents on 6 April 2020, offering to settle the action for £16,000, inclusive of interest, net of any liability the defenders may have had in terms of the Social Security (Recovery of Benefits) Act 1997. The defenders acknowledged receipt the following day and sought further information, including in respect of medical evidence the pursuer relied on.

On 23 June 2020, the pursuer’s agents emailed the court to advise that the Minute of Offer was withdrawn. The pursuer’s agents later emailed the defenders’ agents to say that, in light of the medical evidence, the pursuer was required to undergo further diagnostic testing, and was likely to experience permanent ongoing pain for the foreseeable future.

Further, due to the nature of the pursuer’s employment and the limited time he spent in the UK, he would be able to access private services quicker than the NHS equivalent, something which the courts have been willing to award costs for in similar circumstances. Therefore, a second offer was made in the sum of £25,000.

On 29 June 2020, the defenders’ agent emailed to accept the previous £16,000 offer and sought a motion to grant decree in terms of the original offer. They submitted that the common law of ordinary contractual principles in terms of when an offer fell did not apply in this case, as the offer was made in terms of the Ordinary Cause Rules. The matter was therefore one of statutory interpretation.

The OCR contained a specific rule dealing with the withdrawal of a pursuer’s offer, which did not contain anything regarding implied withdrawal of offers. Thus, the withdrawal of the pursuer’s previous offer was not competent.

In opposition to the motion, the pursuer submitted that there was a presumption against alteration of the common law unless there was an express statement to that effect. The wording of the OCR, which did not contain the words “must” or “only” in the relevant sections, did not remove the possibility of a common law withdrawal.

No sweeping away of existing regime

In his decision, Sheriff McGowan considered the reasoning behind the relevant section of the OCR, saying: “Pursuers’ offers were considered and recommended in the context of methods to facilitate settlement and redressing the ‘balance’ as between pursuers and defender. The innovation brought about by their introduction was to create by rule of court a ‘judicial offer’ system for pursuers which already existed for defenders by reason of established practice and procedure.”

He continued: “The characteristics of pursuers’ offers and the way in which they are designed to operate is immediately recognisable as closely akin to tenders. The law and practice of the court was supplemented by introducing an additional mechanism, but there was no ‘sweeping away’ of an existing regime and replacement of it with something entirely new.”

Therefore, he concluded that the common law was not amended. However, he went on to say: “Nevertheless, there remains a problem. Given that pursuers’ offers are a (relatively) new phenomenon, what is the law in relation to them? While there is no pre-existing body of law relating to pursuers’ offers per se, there is such a body of law applicable to judicial offers, of which tenders and pursuers’ offers are different types. The OCR stated above are derived from and substantially mirror the pre-existing rules applicable to tenders. On that basis, I consider that it is open to the court to take account of the law and practice as it applies to tenders in deciding the present case.”

Following an analysis of case law, he continued: “The law here is clear: where there is a material change of circumstances known to both parties, then a tender will be treated as having lapsed and no longer be open for acceptance.”

Analysing the case using the law of contract, he said: “The position is that in Scots law, an offer may lapse and thus no longer be open for acceptance on the occurrence of certain events, including material change of circumstances. Thus, it appears that where there is room for the application of the common law, as I have held there is in this case, the principles applicable to what might be called ‘contractual situations’ is the same, irrespective of the mechanism.”

He added: “Two points flow from that. First, it would be odd if there was to be a special (or more restricted) set of rules applicable to pursuer’s offers which does not apply elsewhere across the spectrum of contracts, including judicial tenders. Second, it highlights the point that if the applicable contractual principles were to be excluded, one would expect to see that stated explicitly.”

For these reasons, Sheriff McGowan held that the pursuer’s previous offer was no longer open for acceptance and refused the defenders’ motion.

© Scottish Legal News Ltd 2021

Other judgments by Sheriff Kenneth McGowan