Legal update: High Court confirms that no specific form is needed to withdraw a Part 36 offer to settle

1 July 2014

In the case of Supergroup plc v Justenough Software Corp Inc. (2014) the High Court confirmed that no specific form of written notice was required to withdraw an offer to settle made under Part 36 of the Civil Procedure Rules (often referred to as a  ‘Part 36 offer’). An offeror just had to serve something in writing which stated in terms that the offer was withdrawn.


The applicant, Supergroup plc (S) had brought a claim against the respondent, Justenough Software Corp Inc(J) and J had counterclaimed for repudiatory breach of an agreement. J believed S's claim to be spurious and weak and, in November 2013, it served a Part 36 offer on S of an amount that it was prepared to accept in full and final settlement of its counterclaim.

In response to a without prejudice letter from S in April 2014, J stated that it had made an effort to settle the matter, that all offers were withdrawn and that it would only settle if S paid damages for breach of contract and J's costs.

In May 2014, J sent another letter proposing to settle for a higher sum. S served a notice of discontinuance of its claim in May and then wrote to J purporting to accept the Part 36 offer. J replied that that offer had been withdrawn by its April letter.

S made an application seeking a declaration that it had validly accepted the Part 36 offer.

S submitted that:

  1. J's April letter was ambiguous and the reference in it to the withdrawal of offers related to costs, not the Part 36 offer, and that J's reference to the Part 36 offer in its May letter meant that that offer was still on the table; and
  2. the counterclaim was not subject to the notice of discontinuance.


The High Court confirmed that a Part 36 offer was available for acceptance until it was withdrawn by serving written notice of withdrawal, and there was no such thing as an ‘implied withdrawal’. 

It went on further to find that no specific form of written notice was required. An offeror just had to serve something in writing which stated in terms that its offer was withdrawn.

Applying the law to the facts in this case, the Court found that J's Part 36 offer was clearly withdrawn by its April letter. J's reference to the withdrawal of offers related to its offers to settle the matter, not to its offers as to costs. The Court commented that a reasonable solicitor should have understood that J's April letter withdrew the Part 36 offer. J's reference to the Part 36 offer in its May letter did not mean that the offer was still on the table, it just emphasised that J had acted reasonably in trying to settle in relation to costs. It was not possible to revive a Part 36 offer by subsequent correspondence. There had to be a fresh Part 36 offer.

As a separate point, the Court found that the Part 36 offer was an offer to settle the claim and counterclaim on the basis that those claims remained in place. However, after the notice of discontinuance only the counterclaim remained in place, and so it was not open to S to accept the offer in any event.

By Katie Allard, Paralegal, Dispute Resolution

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