Offers to Settle Flashcards
Why are Part 36 offers an important tactical weapon?
Because where an opponent rejects a Part 36 offer, they risk being exposed to serious, automatic costs consequences in the event that they lose at trial
What is the significance of Part 36 offers being made on a WPSATC basis?
Only the maker and the recipient of the offer are entitled to know the content of the offer to the exclusion of any other party to the action and the trial judge
When can a Part 36 offer be accepted?
At any time unless it has been already withdrawn
When can a Part 36 offer be withdrawn?
After the relevant period without permission
What, as opposed to an admission of liability, is a Part 36 offer?
An attempt to force a compromise by pressuring the opponent by way of drastic costs consequences
When calculating the amount to offer in a damages claim, the defendant will aim to-
Arrive at a sum which is towards the lower end of the scale of damages likely to be awarded but sufficiently high to place the claimant at risk as to costs
Five mandatory requirements for a Part 36 offer
Be made in writing; state if counterclaim included; specify a period of no less than 21 days within which the paying party will be liable for the receiving party’s costs if accepted; state whether it relates to the whole or part of the claim; make clear it is made pursuant to Part 36
When is a Part 36 offer made?
When it is served on the offeree
In cases where an offer is made less than 21 days before the start of the trial, the relevant period is-
Up to the end of the trial
Rule 36.8
If the terms of a Part 36 offer are unclear, the offeree may ask the offeror to clarify the offer within 7 days of service of the offer and the offeror has 7 days to respond
If the offeror fails to provide the requested clarification, the offeree-
Is entitled to apply for an order that it be provided
Can the offer make a provision for automatic withdrawal outside the relevant period
Yes
If the offeree has served acceptance within the relevant period then the acceptance will take effect unless-
The offeror applies to the court for permission to withdraw the offer or change its terms
When will the court grant permission to amend the Part 36 offer?
When there has been a change of circumstances and that it is in the interest of justice
Rule 36.11
Notice of acceptance may be served after expiry of the relevant period provided that the offer has not been withdrawn before service of the notice of acceptance
If the offer is accepted outside the relevant period, what about costs?
The parties may agree but otherwise the court will make an order for costs which will usually be for the offeror to pay offeree’s costs until the expiry of the relevant period and the offeree to pay offeror’s costs from then to the acceptance
When can a court make a different costs order when acceptance outside relevant period?
Where there is some fact rendering the usual order unjust
An acceptance of a Part 36 offer relating to only part of the claim-
Results in a settlement of a claim and the offeree’s entitlement to costs only if the offeree abandons the balance of the claim
When is the court’s permission required to accept a Part 36 offer?
When the Part 36 offer is not made by all defendants; when in PI the offer is intended to include any deductible benefits; when the trial has started; when any of the parties is a child or a protected party
What happens to the claim is a Part 36 offer is accepted?
It is stayed
Costs consequences of acceptance of a defendant’s Part 36 offer within the relevant period
The defendant has to pay the claimant the sum accepted within 14 days failing which the claimant is entitled to enter judgment and the defendant is liable to pay the claimant’s costs up to acceptance
Costs consequences of rejection of a defendant’s Part 36 offer
If claimant awarded more than that there is no consequences but if claimant awarded same or less then the court has a discretion to award the defendant their costs from the expiry of the relevant period to trial
Costs consequences of acceptance of a claimant’s Part 36 offer within the relevant period
The defendant is liable to pay the claimant’s costs up to the date of acceptances which are assessed on the standard basis
Costs consequences of rejection of a claimant’s Part 36 offer
If they fail to beat their own offer there are no costs consequences but if they are awarded same or more they will be entitled to interest on all/part damages at an enhanced rate of up to 10% above base rate, costs from expiry of relevant period to be assessed on the indemnity basis and interest on those costs at an enhanced rate as above plus an additional amount of not more than £75,000
Part 36 offers are inclusive of-
Interest
The court will award Part 36 costs penalties only if-
It is just to do so based on the terms of the Part 36 offer made, when the offer was made, the information available to the parties when the offer was made and the conduct of the parties in relation to providing information to enable the offeree to give proper consideration of the offer
If a Part 36 offer is accepted before proceedings are issued-
A claimant is entitled to recover their pre-action costs for steps taken in contemplation of proceedings up to the date of acceptance
If costs are included in the Part 36 offer-
Doesn’t matter - still the usual consequences
As soon as a Part 36 offer is made-
It is incumbent on you as a legal representative to act quickly if there is to be acceptance within the relevant period
What to do upon receipt of a Part 36 offer to advise the client best?
Undertake a risk assessment including evidence, give client reason for advice given, consider obtaining counsel’s advice
Can you seek extension of the relevant period?
Yes
