16: OFFERS TO SETTLE

Question 1

Before trial, for how long is the Part 36 offer open for?

Answer 1

= open for acceptance until withdrawn either by:

1. Time limited
2. Service of written notice of withdrawal

Question 2

What happenes where PT36 is accepted?

Answer 2

case = settled + norm def pays C’s costs.

Question 3

What happens where a PT36 is not accepted?

Answer 3

QUESTION: whether judgment more advantageous than offer.

Pt 36 made without prejudice save to costs + must NOT be mentioned to trial judge until liability + quantum finally determined.

Question 4

What is the general rule for Pt 36 offers?

Answer 4

if Pt 36 accepted = C entitled costs up to date notice of acceptance served on offeror. If C accepts D’s Pt 36 = costs order deemed made on standard basis = C entitled 100% his assessed costs (Qualification: if C’s costs subject fixed costs regime).

Question 5

WHat happens if there a formal/techincal defects to Pt36 offer?

Answer 5

provided “no real uncertainty/ other prejudice to offeree”, court MAY order usual Pt 36 costs follow.

Question 6

What if there are fundamental defects to a pt36 offer?

Answer 6

(e.g. no specify period of not less 21 dys) = preclude offer being treated pt 36.

Pt 36 doesn’t create new entitlement to pre-action costs, but clarifies costs order inc recoverable pre-action costs.

Question 7

With a pt36 offer, Costs determined by court = where:

Answer 7

1. Pt 36 made less 21 dys before start of trial accepted; or
2. Pt 36 which relates whole/part of claim accepted after expiry relevant period,

Liability for costs MUST be determined by court unless parties agreed costs. Costs order not deemed made + liability for costs MUST be determined by court

Question 8

What happens about a late acceptance of Pt36 offer?

Answer 8

In absence of agreement, and acceptance AFTER expiry relevant period = court MUST “unless it considers it unjust” make costs order below:

1. C awarded costs up to date on which relevant period expired; and
2. Offeree pay offeror’s costs for period from date expiry of relevant period to date acceptance.

NO presumption court will order late-accepting party to pay other party’s costs on indemnity basis

Question 9

“upon judgment being entered” =

Is that interpreted narrowly or widely?

Answer 9

Narrowly

Question 10

What happens if

D makes Pt 36 offer?

and C fails fails obtain judgment more advantageous than D’s offer

Answer 10

Court MUST unless “considers it unjust” order D entitled to costs (inc recoverable pre-action costs) from date relevant period expired + interests. Court’s order for assessment on indemnity basis = exercise court’s discretion to costs.

Question 11

What happens if

C makes Pt 36 offer?

and judgment “at least as advantageous”?

Answer 11

court MUST “unless unjust”:

1. Interest on whole/part money awarded at rate not exceeding 10% above base rate for some/all period stating when RP expired;
2. Costs on indemnity basis when RP expired;
3. Interest on costs at rate not exceeding 10% above base rate; and
4. Provided case decided + no previous order, an additional amount not exceeding £75,000

This is NOT designed punish unreasonable conduct but incentive -) encourage C to make + D accept offers

Question 12

What does

“Considers it unjust to do so” =

mean?

Answer 12

Party at risk required -) establish grounds rendering unjust to make order. Question NOT whether offeree had reasonable grounds for rejecting offer, but if usual order would be unjust. Judge shouldn’t make exception because he thinks regime harsh/unjust – the circs must take it out of the norm. Burden on C who fails to beat D’s pt 36 offer to show injustice is formidable obstacle.

“more advantageous” = “better in money terms by any amount, however small”.

Question 13

What does:

GENUINE ATTEMPT TO SETTLE =

mean

Answer 13

Where C makes high settlement offer this is NOT genuine settle, but aims to place D at risk of indemnity costs = Judge MAY refuse order pt 36 consequence. Settlement MUST involve genuine element of concession.

Question 14

How to withdraw a Pt 36 offer:

Answer 14

2 ways of withdrawing offer:

1. Time limited
2. Service of written notice withdrawing

Pt 36 departs from law of contract.

Question 15

Is the pt 36 offer of money, does it include interest?

Answer 15

Offer of sum of money = treated as inclusive all interest up to end relevant period.

No need say offer is “without prejudice except as to costs”. No need to say it expressly.

Question 16

What MMUST specify: period not less 21 dys which D WILL be liable for C’s costs if offer accepted.UST a Pt 36 offer include?

Question 17

What are the formalities for a Pt 36 offer?

Answer 17

• In writing;
• Make clear pursuant to Pt 36;
• If made 21 dys before trial, specify period not less than 21 dys within which D liable for C’s costs if offer accepted;
• State if relates to whole/part claim; and
• State whether it takes account any counterclaim

Question 18

If the Pt 36 offer made less than 21 dys before start trial,

what happens?

Answer 18

• NO NEED specify period not less than 21 days D liable for C’s costs if offer accepted.
• “relevant period” expires @ end of trial (where offer not made less 21 dys before trial, RP = specify period 21 dys D liable for C’s costs, OR consent):
• If Pt 36 accepted = costs MUST be determined by court unless parties agree
• If trial in process = Pt 36 offer can only be accepted with court’s permission

Question 19

Failure of followign Pt 36 formalities

Answer 19

5 requirements. If any missing = likely fundamental defect + doc isn’t Pt 36 offer.

Minor defects causing “no real uncertainty or prejudice” to offeree possibly doesn’t invalidate Pt 36 offer

• Cannot ignore technical failures to comply
• Unless de minimis/ obvious slips that doesn’t mislead

If so = court makes normal costs order.

Significant departures = not Pt 36. Court discretion to correct minor defects/errors.

Question 20

ACCEPTING PT 36 OFFER

MUST:

Answer 20

be in writing:

1. Claim is stayed
2. On terms of offer
3. C entitled to its standard basis costs to date of acceptance
4. Any sum payable MUST be paid within 14 dys of acceptance

Question 21

Acceptance: Exceptional cases on costs

EXCEPTIONAL CASES:

Pt 36

Parties should either agree costs order OR courts will make order for costs:

Answer 21

1. Pt 36 made less than 21 dys before trial
2. Pt 36 accepted after relevant period
3. Pt 36 relates only part of claim

Question 22

Right/Permission to Accept

If Pt 36 NOT withdrawn, what happens?

Answer 22

MAY be accepted at any time as of right, even AFTER relevant period, up to start of trial.

Question 23

Right/Permission to Accept

If Pt 36 NOT withdrawn

Permission is required to accept it where:

Answer 23

1. Trial started
2. One party is child/protected party
3. Most cases where offer made by some defendants
4. D made offer awaiting CRU certificate
5. Apportionment is required in a FAA 1976 case

Question 24

Costs in late acceptance cases

LATE ACCEPTANCE = Parties MAY agree _____?

Answer 24

costs liability, if not, court WILL make order for costs.

Question 25

Part 36 costs

Where court makes costs order, unless unjust, taking into account:

Answer 25

1. Terms of Pt 36;
2. Stage proceedings
3. Information available
4. Conduct of parties
5. Whether offer was genuine offer

The order will provide:

• C entitled to his costs up to when relevant period expired; and
• Offeree liable to offeror’s costs for period from expiry relevant period to date of acceptance.

Question 26

WITHDRAWING/CHANGING Pt 36 offer

How to do this?

Answer 26

Serve written notice of withdrawal/change of terms on offeree. Notice effective when served.

During Relevant Period = before expiry 21 dys relevant period – if offeror serves notice to terms less advantageous:

1. Notice takes effect at end of relevant period if offeree doesn’t serve notice of acceptance during RP;
2. Conflicting notices withdrawal/change + acceptance: (Notice acceptance within RP = acceptance take effect unless offeror issues an application using Part 23 within 7 dys of acceptance notice seeking permission to withdraw/change.

Question 27

On app for permission withdraw/change within Relevant period, what does the Court do?

Answer 27

On app for permission withdraw/change within RP – Court MAY grant permission if:

1. Change of circumstances; and
2. In interests of justice

Question 28

On app for permission withdraw/change after Relevant period, what does the Court do?

Answer 28

After expiry + if offeree NOT previously served notice of acceptance, offeror MAY withdraw/change to terms less advantageous without court permission.

Question 29

What is the effect of withdrawing Pt 36?

Answer 29

A withdrawn Pt 36 doesn’t have effect on costs + interests of subsisting Pt 36.

The court must consider an offer to settle which doesn’t have costs consequences set out in Pt 36 in deciding what costs order to make.

• Party cannot complain if court gives little effect to withdrawn offer
• But court MUST at least consider it
• MAY make significantly different decision on costs relying on offer, even if its been withdrawn.

Question 30

Can a Pt 36 be increased?

Answer 30

May be INCREASED at any time as a right.

Unless first order withdrawn, offeror has 2 offers on table.

Question 31

How are Pt36 aspects dealt with?

Answer 31

Norm most Pt 36 aspects dealt with administratively without needing court order. Including:

• Making;
• Accepting
• Staying claim on acceptance; and
• Costs consequence following acceptance

Question 32

What are the EXCEPTIONS with the Pt 36 offer being dealt with administratively?

Answer 32

EXCEPTIONS: REQUIRES Court order:

1. Permission required to accept offer
   
   1. Children/ protected parties
   2. Cases where trial has started;
   3. Multiple defendants
2. Failure to agree costs after late acceptance;
3. Where offeror wants to withdraw/reduce offer during relevant period;
4. Where offeror wants to clarify Pt 36

Question 33

RESPONDING Pt 36

Offeree makes Counter-offer

Answer 33

other side making counter-offer does NOT operate as rejection of earlier Pt 36 offer. Offeree MAY accept Pt 36 offer after making counter offer = DEPARTURE from norm contract.

Question 34

RESPONDING Pt 36

Rejecting Pt 36

how

Answer 34

Does NOT operate as rejection of earlier Pt 36 offer. Pt 36 ceases to be live by formally withdrawing it.

Question 35

RESPONDING Pt 36

Ignoring Pt 36 =

how

Answer 35

Pt 36 “lapses” by expiry of time if EXPRESSLY STATED in Pt 36 = remains live – capable accepted any time, even if ignored by offeree.

Question 36

SECRECY

Can a pt 36 offer be disclosed?

Answer 36

Pt 36 cant be disclosed to trial/appeal judge until liability + quantum resolved. If disclosed, judge MAY continue hearing case only if NO INJUSTICE.

Question 37

SECRECY

Exceptions to the secrecy being not disclosable?

Answer 37

EXCEPTIONS:

1. Tender before claim;
2. Pt 36 has been accepted + claim stayed;
3. Both parties agree in writing to disclose to trial judge;
4. There has been a split trial + offer relates to decided part

Question 38

COSTS CONSEQUENCE

When offeree fails obtain judgement more advantageous than Pt 36 if:

Answer 38

1. C fails obtain judgment more advantageous than D’s Pt 36; or
2. Judgment against D is at least as advantageous to C as the proposals in a C’s Pt 36 offer.

“more advantageous” = “money terms by any amount, however small”. Court CANNOT consider emotional stress!

Question 39

D’s Pt 36

If judgment not more advantageous than D’s pt 36:

Answer 39

• C recovers standard basis costs to end of relevant period (after 21 dys);
• D recovers standard basis costs thereafter;
• D recovers interest on costs

Question 40

C’s Pt 36

C makes Pt 36 + judgment at least as advantageous to C as terms in C’s Pt 36: C usually recover standard basis costs of claim to end relevant period (costs follow event). UNLESS UNJUST: C MAY be awarded (from end relevant period):

Answer 40

• Indemnity basis costs;
• Interest on damages up to 10% above base rate;
• Interest on any indemnity basis costs at up to 10% above base rate;
• An “additional amount” of 10% on damages, to a max of £75,000

In absence C’s Pt 36, as C won, C norm awarded whole costs on standard basis from start dispute to final disposal. Costs follow event. A Pt 36 rewards C for having made successful Pt 36 offer. Most rewards take effect from expiry relevant period. In damages cases, the 10% increase is technically:

1. 10% of money awarded on first £500,000;
2. 5% of money awarded between £500,000 and £1million

In non-money claims, the 10% increase is based on sum awarded in costs.

Question 41

What does “unles unjust” mean?

Answer 41

Norm consequence of failing to obtain judgment more advantageous than D’s Pt 36 or C’s Pt 36 are displaced if “court considers it unjust”.

In deciding whether to depart form norm rules if unjust – court must:

1. Take account all circumstances of case inc:
   
   1. terms of Pt 36;
   2. Stage of proceedings when made
   3. Info available to parties when Pt 36 made
   4. Conduct of parties, giving/refusing to give info
   5. Whether offer was genuine attempt to settle

Question 42

What does a “genuine attempt to settle mean?

Answer 42

Genuine attempt to settle” = MUST be element of give + take.

Showing “unjust” is a formidable obstacle. It is a mistake for a judge to believe they can do so merely because they think it is harsh.

It was unjust to make norm order where C only beat Pt 36 offer due to change in Ogden Table discount rate.

Question 43

What is the relevant period for Pt 36 offers?

Answer 43

21 dys = relevant period.

Where offer made less than 21 dys before start of trial = relevant period = period up to end of trial.

Question 44

What is a Calderbank offer?

Answer 44

Offer made “without prejudice save as to costs”

• NOT shown to judge on liability/ remedies without joint consent
• “Save as to costs” = can be relied on costs
• Doesn’t need to comply formalities in Pt 36
• Doesn’t involve some obligations under Pt 36, e.g. paying C’s costs if accepted

Calderbanks differ Pt 36 = winner MAY have to pay some/all of offeror’s costs.

Question 45

What is the clarification to a 36 offer?

Answer 45

If Pt 36 terms unclear = offeree may request within 7 dys service of offer + offeror should respond within 7 dys receiving request.

A Calderbank offer is NOT a Pt 36 offer.

Question 46

What is QOCS?

Answer 46

Provides costs protection to CLAIMANTS in PI cases. QOCS = “qualified” one-way costs shifting.

Question 47

Cases where QOCS applies: CNextLAIMANT:

Answer 47

1. Personal injuries
2. Fatal accidents
3. Which arises out of death or personal injury for benefit of an estate

Question 48

Who is the Claimant in QOCS?

Answer 48

“Claimant”:

1. person brining a claim;
2. estate on behalf of which such a claim is brought
3. person making counterclaim/additional claim

Question 49

How to lose QOCS?

Answer 49

Striking out = QOCS is NOT absolute. It will be lost if a case is struck out due to:

1. C having disclosed no reasonable grounds for bringing proceedings;
2. Proceedings are an abuse of the court’s process; or
3. –
   
   1. Conduct; or
   2. Person acting on C’s behalf + with C’s knowledge

Is likely to obstruct the just disposal of proceedings.