Compromise

News | Mon 18th Jul, 2016

Robert Louis Stevenson said that “Compromise is the best and cheapest lawyer”.  Nevertheless, we are often used in order to effect a compromise.  Sometimes, the attempt to settle per se becomes the source of litigation and so it was in last month’s case of DB UK Bank v Jacobs Solicitors (2016) EWHC 1614.

The main proceedings entailed the Claimant Bank bringing a claim in professional negligence against the Defendant Solicitors.  The Bank alleged that it would not have lent money had the Solicitors reported to them properly.   

A week before trial, the Bank’s solicitors sent a letter to the Solicitors’ solicitors which stated that they were accepting an offer which had been set out in an earlier WP letter from the Solicitors.  The Solicitors denied that the claim was so compromised because they contended that there was no binding agreement.

The Bank’s letter which purported to conclude the compromise referred to Part 36 but recognised that it was not governed by it given that it was made less than 21 days before trial.

The judge found that the initial ‘offer’ letter from the Solicitors was indeed one that was capable of acceptance, despite submissions made to the contrary. 

However, he ultimately found that the Bank’s ‘acceptance’ letter was in fact a counter-offer, given that it contained different terms.  The Bank had unsuccessfully argued that Part 36 was a self-governing code and thus the Bank’s reference in its letter to Part 36 meant that the common law presumption of a counter-offer displacing an offer did not apply.

Therefore the case had not been settled and is now awaiting trial. 

Unless it settles this time…