In Dorchester Group Ltd t/a Dorchester Collection v Kier Construction Ltd, the defendant’s solicitors made an “open offer” to the claimant in the form of a letter (the letter), which stated (inter alia):
“In full and final settlement of the Proceedings we set out herein [the Defendant’s] open offer and the terms that relate to it.
For the purposes of the Proceedings only, and without making any admissions of liability save as set out below, [the Defendant] accepts that [the Claimant] is entitled to the following declarations…”
At the hearing, the claimant argued that the letter contained an admission and that the claimant was therefore entitled to judgment because the defendant “now concede[s] that it is liable to account for” the sums at issue in the case.
Coulson J rejected this argument on three main grounds:
- The letter was an open offer with a package of terms to be accepted or rejected. It would be contrary to the whole basis of an offer if the claimant could accept part of it while rejecting other elements of it. In accordance with the overriding objective, “Courts must always encourage parties to make offers, in whatever form is appropriate”. It would be contrary to this policy if the recipient of an open offer could accept parts of it and reject others, thereby ensuring the litigation continues.
- It was not a “formal admission” pursuant to CPR 14.1 (“Admissions made after commencement of proceedings”): (a) the letter made no reference to CPR 14.1, (b) the letter did not admit to the truth of the claimant’s case, but simply accepted it for the purposes of the offer, and (c) the letter made no reference to a key part of the defendant’s defence, meaning that there could be no admission that it was a bad defence or was no longer being pursued.
- For judgment to be entered under CPR 14.1 any admission must be clear and unequivocal: Technistudy v Kelland. This one was not.
The CPR aims to encourage both offers and admissions as ways of reducing the time and cost of litigation. Both can carry favourable costs consequences for the party which makes them. The two are obviously not the same, however, not least because a formal admission will (except in some specific cases) permit the party in receipt of the admission to enter judgment. The decision in Dorchester (albeit an easy one on the facts) offers a helpful indication of how the court will determine the difference between the two.
Much of this is common sense and will come down to the construction of the written instrument. Thus accepting a proposition for the express purpose of making an offer is plainly not the same as formally admitting it. The court will have little time for litigants who try to contrive admissions where there are none. In addition, the principle in Technistudy, that an admission must be clear and unequivocal, will continue to ensure that it is difficult for a party to make a formal admission accidentally (although if it is clear and unequivocal, an admission may be implied rather than express: Ash v Hutchinson & Co (Ltd)).
Importantly (and perhaps, again, obviously), it is not open to the recipient of an offer to cherry-pick individual parts of it as formal admissions while not accepting the offer itself or rejecting other parts of it. This was not the intention of the CPR, and it is highly unlikely to have been the intention of the party making the offer.
Note: although Coulson J observed that the letter did not contain a reference to CPR 14.1 (and this formed part of his reasoning), it is not actually a requirement for it to do so. The rule only requires that an admission be made in writing, whether in the form of a letter, statement of case, or form (N9A for a specified amount; N9C for an unspecified amount). Nonetheless, many formal offers do cite CPR 14.1 expressly so that the doubt never arises.