DR 12 - Settlement Flashcards
What is the purpose of Part 36?
- Provides financial incentives to settle
- Rewards reasonable settlement attempts
- Discourages unnecessary trials
- If a Part 36 offer is rejected and the rejecting party does worse at trial, penalties may apply
When can a Part 36 offer be made?
At any stage of proceedings, including before proceedings are issued
Who can make a Part 36 offer?
Either party (claimant or defendant)
What is the difference between a Calderbank offer and a Part 36 offer?
- Calderbank offer: A “without prejudice save as to costs” offer, not bound by Part 36 rules
- Part 36 offer: Follows strict formalities, including fixed cost consequences
What are the requirements of a valid Part 36 offer?
The offer must:
* Be in writing
* Clearly state it is made pursuant to Part 36
* Specify a relevant period of at least 21 days
* State whether it relates to the whole or part of the claim
* State whether it includes a counterclaim
Can a Part 36 offer be withdrawn?
Yes, but only after the relevant period unless the court allows withdrawal during the period
What happens if the offeree accepts the offer after the offeror has tried to withdraw it?
- The offeror must apply to court within 7 days or before trial
- The court decides if withdrawal is fair
How is a Part 36 offer accepted?
- Serve notice of acceptance (no prescribed form)
- If the case is issued, the acceptance must be filed at court
What happens when a Part 36 offer is accepted?
- The claim is stayed (trial will not continue)
- The defendant must pay the agreed sum within 14 days
- If payment is late, the claimant can enter judgment
Who pays costs when a Part 36 offer is accepted within the relevant period?
The defendant pays the claimant’s costs up to the date of acceptance
What happens if the offer is accepted after the relevant period?
The court decides costs, but generally:
* The claimant gets costs up to the end of the relevant period
* The offeree pays the offeror’s costs after that point
What is the trigger for penalties on a claimant?
If the judgment is not more advantageous than the defendant’s Part 36 offer
What are the consequences for the claimant if the judgment is not more advantageous than the defendant’s Part 36 offer?
- The claimant pays the defendant’s costs from the expiry of the relevant period
- The claimant must pay interest on those costs
What is the trigger for penalties on a defendant?
If the judgment is at least as advantageous as the claimant’s Part 36 offer
What are the consequences for the defendant if the judgment is at least as advantageous as the claimant’s Part 36 offer?
- Indemnity costs from the expiry of the relevant period
- Interest on damages and costs (up to 10% above base rate)
- An additional penalty payment (up to £75,000)
When do Part 36 consequences not apply?
- If the offer was withdrawn
- If the offer was changed to a less advantageous term, and the offeree beat the worse offer
- If the offer was made less than 21 days before trial
What is a consent order?
A court-approved agreement that finalizes a settlement
What are the two types of consent orders?
- Based on contract – Binding like a contract (e.g., Tomlin Order)
- Not based on contract – Court can alter or vary the order
What is a Tomlin Order?
A consent order with:
* A public part (court directions)
* A confidential schedule (detailed terms)
When is a Tomlin Order used?
- When parties want confidentiality
- When the settlement terms go beyond what the court can order
What is needed to settle before a claim is filed?
A settlement agreement (a contract). No court order required
What is discontinuance?
When a claimant voluntarily ends all or part of a claim
Can a claimant discontinue part of a claim?
Yes, a claimant can discontinue against one or all defendants
What are the two main consequences of discontinuance?
- The proceedings end for the discontinued claim
- The claimant must pay the defendant’s costs unless the court orders otherwise
When does the court’s permission need to be obtained for discontinuance?
If the claimant has already received a remedy (e.g., interim payment or injunction)
