5.4 Making, varying, withdrawing and accepting Part 36 offers

Question 1

What are the formalities for making a Part 36 offer?

Answer 1

CPR 36.5
(1)
A Part 36 offer must—
(a)
be in writing;
(b)
make clear that it is made pursuant to Part 36;
(c)
specify a period of not less than 21 days within which the defendant will be liable for the claimant’s costs in accordance with rule 36.13 or 36.20 if the offer is accepted;
(d)
state whether it relates to the whole of the claim or to part of it or to an issue that arises in it and if so to which part or issue; and
(e)
state whether it takes into account any counterclaim.

Question 2

When can a Part 36 offer be made?

Answer 2

CPR 36.7(1)

A Part 36 offer may be made at any time, including before the commencement of proceedings.

Question 3

When is a Part 36 offer made?

Answer 3

CPR 36.7(2)

A Part 36 offer is made when it is served on the offeree.

Question 4

What is the deadline for the offeree to seek clarification of a Part 36 offer?

Answer 4

CPR 36.8(1)

The offeree may, within 7 days of a Part 36 offer being made, request the offeror to clarify the offer.

Question 5

When can a Part 36 offer be withdrawn?

Answer 5

CPR 36.9
(1)
A Part 36 offer can only be withdrawn, or its terms changed, if the offeree has not previously served notice of acceptance.
(4)
Subject to paragraph (1), after expiry of the relevant period—
(a)
the offeror may withdraw the offer or change its terms without the permission of the court; or
(b)
the offer may be automatically withdrawn in accordance with its terms.

Question 6

What is the effect of the offeror serving notice of withdrawal or change of a Part 36 offer to make it less advantageous to the offeree?

Answer 6

CPR 36.10(2)
Where this rule applies—
(a)
if the offeree has not served notice of acceptance of the original offer by the expiry of the relevant period, the offeror’s notice has effect on the expiry of that period; and
(b)
if the offeree serves notice of acceptance of the original offer before the expiry of the relevant period, that acceptance has effect unless the offeror applies to the court for permission to withdraw the offer or to change its terms—
(i)
within 7 days of the offeree’s notice of acceptance; or
(ii)
if earlier, before the first day of trial.

Question 7

Under what circumstances may the court allow an offeror to withdraw or change a Part 36 offer to make it less advantageous to the offeree, where that offer has been accepted?

Answer 7

CPR 36.10(3)
… the court may give permission for the original offer to be withdrawn or its terms changed if satisfied that there has been a change of circumstances since the making of the original offer and that it is in the interests of justice to give permission.

Question 8

When can the offeror change a Part 36 offer to make it more advantageous to the offeree?

Answer 8

Part 36(5)
Where the offeror changes the terms of a Part 36 offer to make it more advantageous to the offeree—
(a)
such improved offer shall be treated, not as the withdrawal of the original offer; but as the making of a new Part 36 offer on the improved terms; and

Question 9

How is a Part 36 offer accepted?

Answer 9

CPR 36.11(1)

A Part 36 offer is accepted by serving written notice of acceptance on the offeror.

Question 10

What is the effect of a Part 36 offer on the trial?

Answer 10

CPR 36.14(1)

If a Part 36 offer is accepted, the claim will be stayed.

Question 11

How long does the claimant have to pay after a Part 36 offer has been accepted?

Answer 11

CPR 36.14(6)
Unless the parties agree in writing … that sum must be paid to the claimant within 14 days of the date of—
(a)
acceptance

Question 12

What happens if the claimant fails to pay the defendant after 14 days have elapsed since acceptance of the Part 36 offer?

Answer 12

CPR 36.14
(7)
If such sum is not paid within 14 days of acceptance of the offer, or such other period as has been agreed, the claimant may enter judgment for the unpaid sum.
(8)
Where—
(a)
a Part 36 offer … which is not an offer to which paragraph (6) applies is accepted [i.e., the parties have agreed a date for payment other than 14 days]; and
(b)
a party alleges that the other party has not honoured the terms of the offer,
that party may apply to enforce the terms of the offer without the need for a new claim.

Question 13

What costs will D have to pay if the Part 36 offer is accepted within the relevant period?

Answer 13

Part 36.13(1)
… C will be entitled to the costs of the proceedings (including their recoverable pre-action costs) up to the date on which notice of acceptance was served on the offeror.

Question 14

Who pays what costs where the Part 36 offer is accepted after the expiry of the relevant period?

Answer 14

CPR 36.13(5)
Where … the parties cannot agree the liability for costs, the court must, unless it considers it unjust to do so, order that—
(a)
the claimant be awarded costs up to the date on which the relevant period expired; and
(b)
the offeree do pay the offeror’s costs for the period from the date of expiry of the relevant period to the date of acceptance.

Question 15

What is the relevant period normally?

Answer 15

CPR 36.5(1)(c)

[not less than 21 days]

Question 16

What is the relevant period where the offer is made less than 21 days before trial?

Answer 16

CPR 36.3(g)

… the period up to the end of such trial.

Question 17

Who pays costs where the offeree accepts an offer that was made less than 21 days before trial?

Answer 17

The court will decide if the parties cannot agree but the claimant is likely to get costs up to the end of trial.