8. Settlement and ADR

Question 1

Difference between a Calderbank offer and Part 36 Offer

Answer 1

Calderbank more flexible as not governed by P36 rules

Question 2

Four formality requirements for P36 offer

Answer 2

(1) In Writing

(2) Say it’s a P36 Offer

(3) Specify Relevant Period

(4) Say whether Offer is to Settle All/Part of the Claim, Including Counterclaims

Question 3

If the Defendant issues a P36O, how should the money be paid?

Answer 3

As a single sum

Question 4

When will D’s offer to settle where payment is suggested more than 14 days after acceptance not be P36?

Answer 4

Where C does not accept

Question 5

When can you make a P36O?

Answer 5

Anytime before judgment

Question 6

When is the offer deemed made?

Answer 6

When served

Question 7

How long does offeree have to ask for clarification?

Answer 7

7 days of offer service

Question 8

When may offeree withdraw offer without court’s permission?

Answer 8

Where trial hasn’t begun; or relevant period has expired

Question 9

When does a notice to withdraw/amend during relevant period take effect?

Answer 9

At the end of the relevant period - unless offeree has accepted offer

Question 10

How long does offeror have to apply to withdraw/amend offer after acceptance?

Answer 10

7 days

Question 11

What is the minimum relevant period time?

Answer 11

21 days

Question 12

When will courts allow withdrawal/amend after acceptance?

Answer 12

Change of circumstances and in the interests of justice

Question 13

Can offeree accept the offer after rejecting it?

Answer 13

Yes - so long as it hasn’t been withdrawn

Question 14

Can you accept an offer after the relevant period?

Answer 14

Yes - but the offeree will usually be liable for offeror’s costs after relevant period until acceptance

Question 15

What P36 cost consequences follow if a P36O is withdrawn?

Answer 15

None

Question 16

What are the cost consequences on acceptance where acceptance was in the relevant period?

Answer 16

Claimant gets costs until notice of acceptance

Question 17

What are the cost consequences on acceptance where acceptance was outside the relevant period?

Answer 17

C gets costs until relevant period expires; offeror gets costs afterwards until acceptance

Question 18

What happens if the P36O is for part of the claim if (a) C abandons rest of claim on acceptance; or (b) C pursues rest of claim on acceptance?

Answer 18

(a) C can only get costs relating to the part of the claim in the offer, unless court says otherwise

(b) Parties agree on costs liability; or court determines

Question 19

When will there be a P36 costs penalty where the defendant makes a P36O, and what is the penalty?

Answer 19

Where C obtains a judgment less advantageous than D’s offer

Penalty - C pays D’s costs from expiry of relevant period plus interest

Question 20

When will there be a P36 costs penalty where the claimant makes a P36O, and what is the penalty?

Answer 20

Where C obtains a judgment as good or better than its offer

Penalty - higher interest on award and costs; costs assessed on indemnity basis; additional % of award (or costs if no award) capped at £75,000

Question 21

What does the court consider when looking at whether it’s unjust to impose P36 cost consequences?

Answer 21

Terms of offer; whether it was a genuine attempt to settle; when it was made; information available to parties; conduct when exchanging information in relation to the offer

Question 22

What happens if judgment was obtained before expiry of relevant period?

Answer 22

No P36 consequences

Question 23

What happens if the offer was changed to less advantageous terms, and the offeree beat that offer on judgment?

Answer 23

No P36 consequences

Question 24

What happens if C and D have simultaneous offers on judgment?

Answer 24

If C should have accepted D’s offer, those consequences apply
If D should have accepted C’s offer, those consequences apply.

Question 25

What is mediation-arbitration?

Answer 25

Parties agree to try mediation, then move to arbitration if that doesn’t resolve the issue.

Question 26

What is expert appraisal, expert evaluation, and early neutral evaluation?

Answer 26

Independent party provides a non-binding opinion helpful for settlement discussions. Parties cover costs of independent party.

Question 27

How does the court encourage ADR in the DQ?

Answer 27

Parties can tick a box to get a 1 month stay to try and settle

Question 28

What is the court’s obligation regarding ADR?

Answer 28

Required to encourage and facilitate ADR if appropriate

Question 29

Can courts compel parties to use ADR?

Answer 29

Yes

Question 30

Discontinuance Form

Answer 30

N279

Question 31

Who pays costs when a case is discontinued?

Answer 31

C pays D’s costs until discontinuance

Question 32

When does C need court’s permission to discontinue?

Answer 32

Exceptional circumstances - like where C has received an interim injunction or payment

Question 33

When does discontinuance take effect?

Answer 33

When the N279 is served on every party