Consequences of unaccepted Part 36 offers at trial Flashcards
What happens if a defendant’s offer is not accepted and the claimant fails to obtain a judgement more advantageous than the defendant’s Part 36 offer?
The claimant pays the defendant’s costs from the date the relevant period expired; and
Interest on those costs.
Who pays the costs in relation to the period before the relevant period expired? The usual costs rules apply.
What does `more advantageous’ mean?
It means better in money terms, however small the amount.
The comparison in money terms is made at the date of judgment. Since the Part 36 offer is deemed to include interest up to the end of the relevant period, interest after that date must be ignored. So, one must compare the sum set out in the Part 36 offer with combined quantum of judgment plus what the judge awards by way of interest up to the end of the relevant period.
What are the consequences if a claimant’s offer is not accepted and the claimant does the same or better at trial than its own Part 36 offer?
Unless it considers unjust to do do, the court must order:
a. Interest on the award at a rate not exceeding 10% above base rate for some or all of the period from the expiry of the relevant period.
b. The costs from the end of the relevant period are to be assessed on the indemnity basis.
c. Interest on those costs at a rate not exceeding 10% above base rate.
d. An additional amount based on a percentage of the award. The percentage being 10% up to £500,000 and 5% above £500,000. The total amount is capped at £75,000.
What happens where a claimant’s offer is not accepted and the claimant does the same or better at trial than its own offer, but the claim does not have any money-claim within it?
The penalty in (d) i.e. an additional amount based on a percentage of the award is calculated with the total amount of costs awarded to the claimant used as the figure in place of the award.
What happens where a claimant’s offer is not accepted and the claimant does the same or better at trial than its own offer, but the claim is subject to the fixed recoverable costs regime?
Instead of being awarded indemnity costs the additional costs awarded are an amount equivalent to 35% of the difference between fixed costs for the stage applicable when the relevant period expires and the stage applicable at the date of judgment. The applicable stages of the case are those set out in table 12 (for fast track cases) and table 14 (for intermediate track cases) of PD45.
What will the court consider in relation to `unless unjust to do so’?
a) The Terms of any Part 36 offer;
b) The stage in the proceedings when the offer was made;
c) The information available to the parties;
d) The conduct of the parties in relation to giving / refusing information for the purposing of enabling the offer to be made /evaluated; and
e) Whether the offer was a genuine attempt to settle.
The courts discretion under this provision is much more limited than the court’s general discretion under the normal costs rules.
What happens if an offer was made within 21 days of trial?
Where an offer was made within 21 days of trial, then even if the applicable `trigger’ is satisfied there will be no Part 36 consequences unless the court shortens the relevant period.
What are the other examples of where Part 36 consequences will not apply?
a) The Part 36 offer was withdrawn; or
b) The Part 36 offer was changed so that its terms are less advantageous to the offeree and the offeree has beaten the less advantageous offer.
What happens if the claimant’s and defendant’s offers are effective at the same time?
Need to consider each offer in turn and apply the relevant rules.
