Dispute Resolution - Part 36 Offers

Question 1

Formal Requirements of a Part 36 offer

Answer 1

1. In writing
2. Clearly state it is made under Part 36 CPR
3. Specify a period for acceptance (“relevant period”) - must be at least 21 days. Part 36 offer cannot be withdrawn in this period.
4. State whether it is the whole or part
5. State whether offer takes into account any counter claim

Question 2

When can a Part 36 offer be made?

Answer 2

All claims other than those on small claims track

At any time in proceedings and before a claim has been issued

Question 3

Can Part 36 offer be withdrawn?

Answer 3

Yes, unless offeree has served notice of acceptance

Question 4

Accepting Part 36 offer

Answer 4

Can be accepted at any time even after expiry of “relevant period” so long as offer has not been withdrawn

Acceptance must be in writing

Question 5

Claimant accepting defendant’s offer

Answer 5

Within relevant period: claimant is entitled to their costs up to the date of acceptance

Outside relevant period: claimant entitled to their costs only up to the end of the relevant period

Question 6

Defendant accepting claimant’s offer

Answer 6

Within relevant period: become liable to pay claimant’s costs of the proceedings up until the date of acceptance - claimant has automatic entitlement to these costs to be assessed on standard basis

Outside relevant period: court will decide liability for costs if parties cannot agree

Question 7

Defendant makes Part 36 offer, claimant rejects offer and obtains a more favourable result at trial

Answer 7

No sanctions

Question 8

Defendant makes Part 36 offer, claimant rejects offer but fails to obtain a more favourable result at trial

Answer 8

Sanction, *unless unjust *- by not accepting offer the claimant has increased costs by continuing with litigation

Claimant to pay defendant’s costs on standard basis from date that the relevant period for acceptance expired

Claimant pays own costs incurred after the relevant period

Question 9

Claimant makes Part 36 offer, defendant rejects offer and claimant fails to obtain a more favourable result at trial

Answer 9

No sanctions

Question 10

Claimant makes Part 36 offer, defendant rejects offer and claimant obtains equal or more favourable result

Answer 10

Sanction, unless unjust

Enhanced interest (10% above base rate) for the period after the time for acceptance expired

Defendant pays claimant’s costs after the relevant period expired on an indemnity basis

Defendant will also be ordered to pay claimant’s costs up to the start of the relevant period on a standard basis

Possible additional damages, additional 10% on top of sum awarded by court for first £500,000 and 5% on anything above £500,000

Question 11

Unjust Sanction

Answer 11

Sanctions are discretionary

When deciding whether sanctions would be unjust the court will consider:

• Terms of offer
• Stage when made
• Information then available
• Conduct of parties