Part 36 Flashcards
GOLDEN RULE
OFFEROR IS NEVER PUNISHED FOR MAKING A BAD OFFER (e.g. overpitched)
Part 36 exam Q
- How does it compare with a normal without prejudice offer?
- Talk about Part 36 offer formalities (CPR 36.5)
- Go through FLAC (facts, law, application, conclusion)
- who made offer
- CPR 36.17 which part?
- who does court want to penalise
- how and for what period?
make sure you know who made the offer (or the whole thing goes wrong)
WHAT IS PART 36?
offer of settlement with financial incentives (in contrast to informal offers to settle)
REALLY IMPORTANT TACTICAL WEAPON to encourage other side to settle
- if strong case, pressurises other side to pay
- if weak case, resolve proceedings without losing at trial
what financial incentives?
- Extra costs,
- Additional damages (only in part 36) and/or
- Extra interest (extra interest on quantum and/or costs)
best time to make offer
ONE - just before trial (before expensive pre-trial expenses)
- have all info
- fresh assessment of likely outcome
- but recoverable costs more limited
TWO - (slightly blind offer) right at the start
- never punished for wrong offer so might as well
- take a chance
what happens after settlement?
if court is involved (i.e. proceedings commenced) –> let the court know
- draft and send consent order to court
- proceedings will be stayed
if court not involved (i.e. settlement before issuing CF) –> no need to let court know
- parties could be negotiating in 6 year limitation period without issuing CF
RATIONALE BEHIND PART 36
Part 36 makes it attractive to make an offer to settle
if parties make a sensible proposal to settle actions, they should get some benefit if they are not accepted when they are
party dragged to trial having tried to be reasonable should be compensated
unreasonable party should be penalised
how to make the offer?
MUST comply with rules in Part 36
- see Part 36.5
- follow 36.5 carefully
interest?
- treated as inclusive of interest until day relevant period expires
without prejudice?
YES CPR 36.16(1)
- but best practice is to head it ‘without prejudice except as to costs’
changing an offer?
IF offerree has not accepted (served notice of acceptance)
- serve written notice of withdrawal or change of terms on other party
- notice takes effect when served on offerree
IF WITHIN RELEVANT PERIOD
- offeree can still accept original offer
- offeror has to apply to court within 7 days of acceptance
- permission to change only given if change of circumstances or interest of justice
pros of part 36
- bonus award of damages can be awarded if D unreasonably refuses
- costs consequences set out in detail (no uncertainty as to punishments)
cons of part 36
- less flexible (more prescriptive) - e.g. 21 days relevant period (if WP could exert commercial pressure by leaving offer open for very short period)
- rigid time limits
- D’s offer can only be a lump sum (not instalments or a more commercial settlement agreement)
- no Part 36 in arbitration
- legal advice is required (because of legal effects)
- if want to withdraw offer within 21-day period, court’s permission is required
how to accept
- serve written notice of acceptance on offeror
- file notice of acceptance with the court (36A PD 3.1) if proceedings have been issued
- can accept when trial is in progress but you need court’s permission to do this
Case will be stayed (or part covered by accepted offer) and not continue to trial
Acceptance outside provisions of Part 36, while still valid, has no benefit of Part 36 provisions
C is punished if
unreasonable to reject
- lost
- won but awarded same or less
