part 36 Flashcards
what are the advantages of a part 36 offer?
Costs: The court generally has a wide discretion when awarding costs, and will consider the behaviour of both parties, including their efforts to settle the case – BUT advantage of Part 36 is that the financial incentives contained within it are more certain than the court’s general discretion and go beyond what the court can generally order
Rejected offer letter does not need to be disclosed to the court: A Part 36 offer is treated as ‘without prejudice except as to costs’ and the fact that a Part 36 offer has been made and the terms of such offer must not be communicated to the trial judge until the case has been decided.
When can a Part 36 offer be made?
any stage of proceedings and before proceedings
offer can be made by either party
‘Calderbank offer’
An offer usually communicated in writing, and written ‘without prejudice save as to costs’ which cannot be referred to the judge until costs are considered after trial – such an offer does not need to comply with Part 36
Part 36 vs Calderbank offer
The specific consequences of Part 36 do not apply to Calderbank offers, but the court will have regard to them when it exercises its discretion on costs.
However, if a party wants to avail itself of the specific cost consequences and protection afforded by Part 36 it must make the offer in compliance with the rules set out in Part 36
Contents of a Part 36 offer – required for validity
Additional rules that only apply to Ds offers
- in writing or form N24A
- Make clear its pursuant to part 36
- specific period of at least 21 days within which D will be liable for Cs costs if the offer is accepted
- state is whole or part of the claim
Additional requirements for Ds offers:
- Offer to pay a single sum of money, limited exceptions
- Ds offer to pay all or part at a date later than 14 days following the date of acceptance will not be traded as a part 36 offer unless C accept the offer
Contents of a Part 36 offer – required for validity
Additional rules that only apply to Ds offers
- in writing or form N24A
- Make clear its pursuant to part 36
- specific period of at least 21 days within which D will be liable for Cs costs if the offer is accepted
- state is whole or part of the claim
Additional requirements for Ds offers:
- Offer to pay a single sum of money, limited exceptions
- Ds offer to pay all or part at a date later than 14 days following the date of acceptance will not be traded as a part 36 offer unless C accept the offer
can the offer be withdrawn if accepted?
No
Can the offer be withdrawn if trial has already started?
The courts permission will be required
Can offer be withdrawn if relevant period has expired?
If relevant period expired: The offer can be withdrawn, or its terms changed without the court’s permission. The offer can also be withdrawn automatically if its terms state so. This allows the offeror to make an offer that is time limited (cannot be before 21 days)
Can offer be withdrawn if relevant period has not expired?
- If relevant period has not expired:
o Any notice of withdrawal or change during the relevant period will take effect at the end of the relevant period if the offeree does not serve notice of acceptance during the relevant period.
o If offeree serves a notice of acceptance during the relevant period (despite the notice of withdrawal / change) then the offeror can either:
(1) allow the acceptance or
(2) 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.
What must offeree do to accept a Part 36 offer?
1) Serve written notice of acceptance on the offeror (no prescribed form
2) Filed at court (only if the case is already issued)
How long does the offeree have to accept the offer?
An offer remains open for acceptance unless it has been withdrawn. This remains the case even after the relevant period has expired, unless offer is expressed to be withdrawn automatically at the end of the relevant period
what are the consequences of accepting a part 36 offer
- stay of claim
- settlement sum:
- If the offer includes an offer to pay or accept a single sum of money – the defendant has 14 days from the acceptance to pay the settlement amount unless otherwise agreed in writing, and if the defendant does not pay within this time, the claimant can enter judgment against the defendant
If the offer does not include an offer to pay this, then if a party fails to comply with whatever was agreed, the aggrieved party can apply to court to enforce the terms of the offer without the need to start separate court proceedings
- costs:
The cost consequences of acceptance depend on when the offer was accepted
what is the cost consequence If acceptance is within the relevant period
If accepted before the expiry of the relevant period, the claimant is entitled to its costs of the proceedings up to the date the notice of acceptance was served on the offeror – This is the case regardless of which party made the offer to settle.
what is the cost consequence If acceptance is outside the relevant period
a) The court will determine liability for costs unless the parties agree them; BUT
b) The court must, unless it considers it unjust to do so, order that:
i. the claimant be awarded costs up to the date the relevant period expired; and
ii. the offeree pays the offeror’s costs for the period from the date of expiry of the relevant period to the date of acceptance
what is the cost consequence If acceptance is outside the relevant period
what are the Special rules – if the offer was made less than 21 days before trial
The court must determine liability if the parties do not agree liability for costs
Special rules – if the offer was made less than 21 days before trial
The court must determine liability if the parties do not agree liability for costs
Accepting a Part 36 offer which relates to part of a claim – cost consequences
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 the liability
Defendants offer- A claimant fails to obtain a judgment more advantageous (in money terms) than a defendant’s part 36 offer’
what are the consequences?
he penalty imposed on the claimant that does not accept a defendant’s offer is that the claimant must pay the defendant’s costs after the relevant period expired with interest (unless the court considers it unjust).
- costs after relevant period expires + interest on those costs: claimant pays its own costs + defendant’s costs
- costs before relevant period expires: the usual costs rules apply (CPR 44)
-if the claimant wins at trial, the defendant will pay the claimant’s costs in relation to this period but if the defendant won then the claimant pays the defendant’s cost in relation to this period (but the court has discretion on this issue)
-the costs can be ‘split’
Claimant part 36 offer
Judgment against the defendant is at least as advantageous to the claimant as the proposals contained in a claimant’s Part 36 offer
The penalty imposed on the defendant is that the court must order (unless unjust):
- Indemnity costs- from the expiry of the relevant period
- Interest on those cost up to 10% of base
- Interest on damages up to 10%
- Additional amount, depending on the sum
£500k or < interest at 10%
£500k> interest at 5%
claimant offer, the claimant has not obtained a judgment a least advantageous as its offer
No consequences
what would be considered under ‘ unless unjust’
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
E) Whether the offer was a genuine attempt to settle
- The court’s discretion under this provision is much more limited than the court’s general discretion under the normal costs rules
