Part 36 Offers and Costs

Question 1

Costs and Part 36 Offers

Blue

Answer 1

General Rule under CPR 44.2 (2) - loser pays the winners costs.

But court has discretion to make a different order, under CPR 44.2 (4) and (5).

Purpose of Part 36 Offer is to provide financial incentives for actions to be settled.

Part 36 Offers are ‘Without Prejudice’ save as to costs.

Question 2

Part 36 Offer: Form and Content

Answer 2

To amount to a Part 36 Offer, must follow form and content requirements set out in CPR 36.5

• Must be in writing
• Must make clear that it is being made purusant to Part 36
• Must state a period of at least 21 days within which the defendant will be liable for the claimant’s costs if the offer is accepted (‘the relevant period’) **
• Must state whether it relates to the whole of the claim, or part of it, or to a specific issue etc.

Note CPR 36.6 - big caveat:
Will only be a Part 36 Offer if:
- Setlement to be paid in 1 lump sum; amd
- Within 14 days

(Therefore, settlement offers to be paid in installments, or structured over a longer period, will not have Part 36 consequences!

** Also, an offer made less than 21 days before trial does not carry Part 36 consequences - will be like any other offer to settle (court can still take into account at costs stage, under CPR 44.2)

CPR 36.7 - Part 36 Offer made when ‘served on the offeree’ - usual rules of services under CPR 6 apply.

Question 3

Cost Consequences of both Acceptance and Rejection

Answer 3

See diagrams.