17. Part 36 Offers

Question 1

What is a Part 36 offer?

Answer 1

A formal, without prejudice offer, to settle a claim

Question 2

Who can make a Part 36 offer and what must they specify in the offer?

Answer 2

Either party can make a Part 36 offer, and they must specify the amount they would be prepared to pay/accept to settle

Question 3

What are the five requirements of a Part 36 offer?

Answer 3

1. In writing
2. Clearly state that it is made pursuant to CPR Part 36
3. Specify the relevant period (not less than 21 days) within which the offer can be accepted
4. State whether the offer relates to all or just part of the claim
5. State whether the offer takes into account any counterclaim

Question 4

If a Part 36 offer, made by either party, is accepted within the relevant period, up until when will defendant pay the costs of the claim, and on what basis will they be assessed?

Answer 4

The defendant will pay costs on the standard basis up to the point of acceptance

Question 5

What may the offeror be awarded if they make a Part 36 offer pre-issue and the parties settle the claim before proceedings begin?

Answer 5

Pre-issue costs that they incurred

Question 6

What may the offeror be awarded if they make a Part 36 offer pre-issue but it is rejected by the other party, and the offeror wins the case?

Answer 6

Costs related to pre-action work, in addition to the costs of the litigation

Question 7

If a Part 36 offer is unclear, within what time limit must the offeree request clarification?

Answer 7

Seven days

Question 8

Can a Part 36 offer be withdrawn?

Answer 8

As long as the offeree has not served notice of acceptance

Question 9

If a notice of withdrawal or to change the terms to ones less favourable for the offeree is served before the expiry of relevant period, when does the notice take effect?

Answer 9

When the relevant period expires, unless the offeror accepts within that time (in which case the offer cannot be withdrawn/amended in the usual way)

Question 10

After acceptance, within what time limit can the offeror apply to the court to change the terms of the offer?

Answer 10

7 days

Question 11

What two things must the court be satisfied of to grant permission to withdraw or amend a Part 36 offer after it has accepted?

Answer 11

1. Change of circumstances since the offer was made
2. In the interests of justice to give permission

Question 12

How must a Part 36 offer be accepted?

Answer 12

In writing

Question 13

When can a Part 36 offer be accepted?

Answer 13

At any time: within the relevant period with no limitations, and after the relevant period as long as the offeror has not withdrawn the offer

Question 14

If a claimant accepts a defendant’s Part 36 offer outside the relevant period, up until when will the defendant’s liability to pay the claimant’s costs run?

Answer 14

Until the end of the relevant period

Question 15

If a defendant accepts a claimant’s Part 36 offer outside the relevant period, who will decide liability for costs if the parties cannot agree?

Answer 15

The court

Question 16

What is required to accept a Part 36 offer after trial has started?

Answer 16

Court permission

Question 17

What is required to accept a Part 36 offer from a single defendant in a case with multiple defendants?

Answer 17

Court permission

Question 18

What are the two situations where a Part 36 offer might cause cost-related difficulty for a party?

Answer 18

1. Claimant rejects defendant’s offer and fails to beat offer
2. Defendant rejects claimant’s offer and claimant is awarded an amount equal to or greater than the offer

Question 19

What are the two situations where a Part 36 offer might will not cause cost-related difficulty for a party?

Answer 19

1. Claimant rejects defendant’s offer and beats it
2. Defendant rejects claimant’s offer and the claimant is awarded less

Question 20

Where a claimant rejects a defendant’s offer and fails to beat the offer, what is the consequence?

Answer 20

Defendant will have costs awarded on a standard basis from the date when the relevant period of acceptance expired

Defendant will usually still have to pay costs up to the expiry of the relevant period

Question 21

Where a defendant rejects a claimant’s offer and claimant is awarded an amount equal to or greater than the offer, what is the consequence?

Answer 21

Unless it is unjust, for the period after the time for acceptance expired, costs will be assessed on an indemnity basis and the claimant will be entitled to 10% interest on top of costs accrued within this period.

Question 22

How is the amount to be paid by the defendant calculated in damages only or mixed claims?

Answer 22

As a percentage of the damages awarded to the claimant

Question 23

How is the amount to be paid by the defendant calculated in non-monetary claims, and what is the cap?

Answer 23

As a percentage of the costs that the court has ordered the defendant to pay the claimant, subject to a cap of £75,000

Question 24

What things will the court consider when determining whether an order for failure to accept a Part 36 is unjust, such that the court will exercise discretion not to make the order?

Answer 24

1. Stage of proceedings when the offer was made
2. Conduct of the parties
3. Whether the offer was a genuine attempt to settle