Making, varying, withdrawing and/or accepting Part 36 offers

Question 1

How do you make a valid Part 36 offer?

Answer 1

The offer must:

a. Be in writing

b. Make clear 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 if the offer is accepted (“relevant period”)

d. State whether it relates to the whole or part of the claim; and

e. State whether it takes into account any counterclaim.

Question 2

What two further rules apply to a defendant’s offer?

Answer 2

a. Within limited exceptions, Part 36 offer by a defendant to pay a sum of money in settlement must be an offer to pay a single sum of money.

b. A defendant’s offer that includes an offer to pay al or part of the sum at a date later than 14 days following the date of acceptance will not be treated as a Part 36 offer unless the offeree accepts the offer.

Question 3

What form must an offer take?

Answer 3

The wide definition of writing means that a party could make a Part 36 offer in a letter.

If a letter is used, somewhere in the letter it should state it is made pursuant to Part 36.

There is also a prescribed form N242A - if completed properly this compiles with Part 36 offer rules.

Question 4

When is a Part 36 offer made?

Answer 4

When it is served on the offeree. The rules of service apply.

Question 5

What will be the consequences in relation to a Part 36 offer made before proceedings and acceptance after issue of proceedings?

Answer 5

Normal Part 36 consequences (including recoverable pre-action costs).

Question 6

What will be the consequences where a Part 36 offer is made and accepted before proceedings are commenced?

Answer 6

The Part 36 consequences of acceptance have no effect since the consequences are dependent upon there being extant proceedings.

Question 7

It is possible to clarify a Part 36 offer?

Answer 7

Yes, the offeree must seek clarification within 7 days of service.

Question 8

How do you withdraw the offer if it has already been accepted?

Answer 8

Not possible.

Question 9

How do you withdraw a Part 36 offer if the trial has already started?

Answer 9

Need to seek court permission.

Question 10

If the trial has not already started and the offer has not been accepted, how do you withdraw an offer if the relevant period has expired?

Answer 10

The offer can be withdrawn or its terms changed without the court’s permission. The offer can also be withdrawn automatically if the terms state so.

Question 11

If the trial has not already started and the offer has not been accepted, how do you withdraw an offer if the relevant period has NOT expired?

Answer 11

Any notice of withdrawal / change during the relevant period will take effect ay the end of the relevant period, if the offeree does not serve notice of acceptance during the relevant period.

If the offeree does serve notice of acceptance during the relevant period despite the notice of withdrawal then the offeror can either allow acceptance or apply to the court for permission to withdraw the offer or to change its terms.

This must be done within 7 days of the notice of acceptance or if earlier before the first day of the trial. 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 it is in the interests of justice to do so.

Question 12

How do you accept a Part 36 offer?

Answer 12

Serve written notice of acceptance on the offeror.

If the case is issued the acceptance also needs to be filed at court.

There is no prescribed form for this, it could be a letter.

Question 13

What are the three consequences of acceptance?

Answer 13

1. Stay - the claim will be stayed and will not continue to trial.
2. Settlement sum - for any Part 36 offer which is, or includes, an offer to pay, the defendant has 14 days from acceptance to pay the settlement amount unless otherwise agreed in writing.
3. Costs - depend on when the offer was accepted.

Question 14

What are the cost consequences if the offer is accepted in the relevant period?

Answer 14

The claimant is entitled to their costs of the proceedings up to the date of notice of acceptance was served on the offeror.

Question 15

What are the cost consequences for acceptance after the relevant period?

Answer 15

1. The court will determine liability for costs unless the parties agree them; BUT
2. The court must, unless it considers it unjust to do so, order that -

a. the claimant be awarded costs up to the date the relevant period expired; and

b. the offeree pay’s the offeror’s costs for the period from the date of expiry of the relevant period to the date of acceptance.

Question 16

What are the cost consequences if the offer was made less than 21 days before trial?

Answer 16

In this situation, if the parties do not agree liability for costs the court must determine liability.

Question 17

What are the cost consequences for accepting an offer relating to part of a claim?

Answer 17

If, at the time of acceptance, the claimant abandons the remainder of the claim, the claimant will only be entitled to the costs relating to the part of the claim contained in the offer, unless the court orders otherwise.

If, at the time of acceptance, the claimant does not abandon the remainder of the claim, the liability for costs will be determined by the court, unless the parties can reach an agreement about liability.