Settlement Flashcards
Define the consequences of making a Part 36 offer that is accepted.
If a Part 36 offer is accepted, the terms of the offer are enacted, and the case is settled according to those terms.
Describe Part 36 of the Civil Procedure Rules.
Part 36 is a self-contained procedural code that governs offers made under its specific procedures.
When can a Part 36 offer be made?
Part 36 offers can be made at any stage of proceedings, including before proceedings are issued.
Define a Calderbank offer.
A Calderbank offer is an offer usually communicated in writing, made ‘without prejudice save as to costs’, which cannot be referred to the judge until costs are considered after trial.
Describe the main difference between Part 36 offers and Calderbank offers.
Part 36 offers are specific and must comply with the rules set out in Part 36 to avail of certain cost consequences, while Calderbank offers do not need to comply with these rules and are communicated ‘without prejudice save as to costs’.
How does a Calderbank offer affect court discretion on costs?
The court will consider a Calderbank offer when exercising its discretion on costs, even though the specific consequences of Part 36 do not apply.
How does Part 36 interact with Calderbank offers?
Part 36 does not prevent a party from making a Calderbank offer, but to receive the specific protections of Part 36, the offer must comply with its rules.
How should a Part 36 offer be communicated if made in writing?
If made in writing, a Part 36 offer should state that it is made pursuant to Part 36.
Describe the requirements for a valid Part 36 offer according to CPR 36.5.
A valid Part 36 offer must be in writing, clearly state it is made pursuant to Part 36, specify a relevant period of not less than 21 days for costs liability, indicate whether it relates to the whole or part of the claim, and state if it takes into account any counterclaim.
Explain the significance of the 21-day timeframe in relation to cost consequences in legal offers.
The 21-day timeframe is significant because it triggers different rules for cost consequences if an offer is accepted within this period.
Explain the implications of a Part 36 offer being withdrawn.
If a Part 36 offer is withdrawn, it is no longer open for acceptance.
What is the significance of CPR 36.11(1) in the acceptance of a Part 36 offer?
CPR 36.11(1) outlines the requirement to serve written notice of acceptance on the offeror.
What happens if a defendant’s offer includes a payment date later than 14 days after acceptance?
The offer will not be treated as a Part 36 offer unless the offeree accepts it.
Define the term ‘Relevant period’ in the context of a Part 36 offer.
The ‘Relevant period’ is a period of not less than 21 days specified in a Part 36 offer, during which the defendant will be liable for the claimant’s costs if the offer is accepted.
How can an offeree seek clarification of a Part 36 offer?
The offeree can seek clarification of the terms of the offer, such as a breakdown of its components, within 7 days of service, according to CPR 36.8.
Can a part 36 offer be withdrawn once accepted?
A Part 36 offer cannot be withdrawn or its terms changed if it has already been accepted (CPR 36.9(1)).
What happens if a Part 36 offer is withdrawn after the trial has started?
If the trial has already started, the offer cannot be withdrawn without the court’s permission.
Can a Part 36 offer be withdrawn if the relevant period has expired?
If the relevant period has expired, the offer can be withdrawn or its terms changed without the court’s permission.
Explain the automatic withdrawal of a Part 36 offer.
A Part 36 offer can be withdrawn automatically if its terms explicitly state so, allowing the offeror to set a time limit.
What options does the offeror have if the offeree serves notice of acceptance during the relevant period?
If the offeree serves notice of acceptance during the relevant period, the offeror can either allow the acceptance or apply to the court for permission to withdraw the offer or change its terms.
What is the time frame for the offeror to apply for permission to withdraw an offer after acceptance?
The offeror must apply for permission to withdraw the offer or change its terms within 7 days of the notice of acceptance or before the first day of the trial, whichever is earlier.
Under what circumstances may the court grant permission to withdraw a Part 36 offer?
The court may grant permission to withdraw the original offer or change its terms if it is satisfied that there has been a change of circumstances since the original offer was made and that it is in the interests of justice.
Describe the process for accepting a Part 36 offer.
A letter is sufficient to accept a Part 36 offer, and written notice of acceptance must be served on the offeror.
What must be done if the case is issued when accepting a Part 36 offer?
If the case is issued, the acceptance also needs to be filed at court.
Define the status of a Part 36 offer after the relevant period has expired.
An offer remains open for acceptance unless it has been withdrawn, even after the relevant period has expired, unless it is expressly stated to be withdrawn automatically.
How long does a defendant have to pay the settlement amount after accepting a Part 36 offer?
The defendant has 14 days from acceptance to pay the settlement amount agreed, unless otherwise agreed in writing (CPR 36.14(6)).
Define the action a party can take if a Part 36 offer does not include a single sum payment and the other party fails to comply.
The aggrieved party can apply to court to enforce the terms of the offer without the need to start separate court proceedings (CPR 36.14(8)).
Describe the cost consequences of acceptance in 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.
Describe the cost consequences if an offer is accepted after the relevant period has expired.
The court will determine liability for costs unless the parties agree otherwise. The claimant is awarded costs up to the date the relevant period expired, and the offeree must pay the offeror’s costs from the expiry date to the date of acceptance.
Explain the punishment aspect related to costs for the offeree.
The offeree is punished by having to pay costs for not accepting the offer within the relevant period when they had the chance.
What happens if a claimant accepts a Part 36 offer and abandons the remainder of the claim?
If the claimant abandons the remainder of the claim upon acceptance, they will only be entitled to the costs related to the part of the claim included in the offer, unless the court orders otherwise (CPR 36.13(2)).
How is liability for costs determined if a claimant accepts a Part 36 offer but does not abandon the remainder of the claim?
If the claimant does not abandon the remainder of the claim, the liability for costs will be determined by the court unless the parties reach an agreement about the liability (CPR 36.13(4)).
Explain the trigger for consequences when a defendant’s Part 36 offer is not accepted.
The trigger occurs when a claimant fails to obtain a judgment that is more advantageous than the defendant’s Part 36 offer.
Explain the additional amount awarded to a claimant when the judgment exceeds their Part 36 offer.
The additional amount is calculated as 10% of the award up to £500,000 and 5% of the amount above £500,000, with a total cap of £75,000.
How does the withdrawal or change of a Part 36 offer affect its status?
A Part 36 offer is affected if it is withdrawn or changed to less advantageous terms for the offeree, and if the offeree beats the less advantageous offer.
How does the timing of a Part 36 offer impact its potential benefits for the offeror?
The earlier a Part 36 offer is made, the greater the potential benefits to the offeror, especially if it is made more than 21 days before trial.
What is the penalty for a claimant who fails to beat a defendant’s Part 36 offer?
The penalty for a claimant who fails to beat a defendant’s offer is that the claimant may be ordered to pay the defendant’s costs.
What happens if the trial judgment is better than the defendant’s Part 36 offer?
If the trial judgment is more advantageous than the defendant’s Part 36 offer, the claimant may not face penalties for not accepting the offer.
Describe the consequences for a claimant if they fail to obtain a judgment more advantageous than a defendant’s Part 36 offer.
The claimant must pay the defendant’s costs from the date the relevant period expired, along with interest on those costs, unless the court considers it unjust.
Explain the implications of a defendant’s Part 36 offer of £2 million if the judgment for the claimant is £1 million.
The claimant has failed to beat the defendant’s offer, resulting in the defendant being entitled to its costs from the expiry of the relevant period and interest on those costs.
Explain the consequences for a claimant if they fail to obtain a judgment more advantageous than a defendant’s Part 36 offer.
If the claimant fails to obtain a judgment more advantageous than the defendant’s Part 36 offer, the defendant will receive its costs from the expiry of the relevant period and interest on those costs, unless unjust.
Define a ‘split costs order’ in the context of legal costs.
A ‘split costs order’ refers to a situation where the claimant is ordered to pay the defendant’s costs and interest on those costs unless unjust, while the defendant may also be ordered to pay the claimant’s costs for a different period.
What happens if a claimant obtains a judgment more advantageous than a defendant’s Part 36 offer?
If the claimant obtains a judgment more advantageous than the defendant’s Part 36 offer, there are no consequences under Part 36 for the defendant, and the claimant is likely to receive its costs for the whole claim under normal costs rules (CPR 44.2), subject to the court’s discretion.
What is the ‘trigger’ for consequences under CPR 36.17 when a claimant’s offer is involved?
The ‘trigger’ is when the judgment against the defendant is at least as advantageous to the claimant as the proposals contained in the claimant’s Part 36 offer.
Discuss the likely outcome for a claimant if their offer is not accepted and they win the case.
If the claimant’s offer is not accepted and they win the case, they are likely to receive their costs for the whole claim under the normal costs rules (CPR 44.2), but this is at the court’s discretion.
What are the potential costs consequences for a defendant if they make a Part 36 offer of £2 million and the judgment is in their favor?
The defendant will likely receive its costs from the expiry of the relevant period and interest on those costs, unless unjust, and may also receive costs up to the end of the relevant period under normal costs rules (CPR 44.2), at the court’s discretion.
Describe the consequences for a defendant who fails to accept a claimant’s Part 36 offer when the claimant does better at trial.
The court must order interest on the award at a rate not exceeding 10% above base rate, costs assessed on the indemnity basis, interest on those costs at a rate not exceeding 10% above base rate, and an additional amount based on a percentage of the award, capped at £75,000.
What happens if the claimant does worse at trial than their Part 36 offer?
If the claimant does worse at trial than their offer, the claimant’s Part 36 offer has no effect and no penalties are imposed on the defendant.
Describe the conditions under which a Part 36 offer is considered to have no effect at trial in terms of
A Part 36 offer has no effect at trial if the claimant has not won the same or more than their own offer, and if the claimant has not won the same or less than the defendant’s offer.
Explain the implications for costs if the judge awards an amount less than both the claimant’s and defendant’s offers.
If the judge awards an amount less than both offers, neither offer has any effect, and costs are likely to be awarded under the normal principles.
How does a defendant’s offer become effective at trial?
A defendant’s offer becomes effective if the judge awards an amount that is the same or less than the defendant’s offer.
What must a party do to obtain full costs protection under Part 36?
To obtain full costs protection under Part 36, a party must make the offer more than 21 days before trial and leave the offer open without withdrawing it.
What happens if an offer was made within 21 days of the trial?
There will be no Part 36 consequences unless the court shortens the relevant period . This is because the relevant period (which is always at least 21 days) had not expired before trial. The offeree did not have a fair opportunity to accept the offer.
Explain the difference between the triggers for the claimant’s offers and defendant’s offers
Think: claimant is king
therefore if claimant makes an offer, the award must be as advantageous (lower burden) for the claimant for defendant to be penalised.
If defendant makes an offer, and award is not more advantageous to the claimant then claimant won’t be
How does a consent order differ from a contract?
A consent order is not a contract; it represents the parties agreeing to terms of settlement, which may be altered or varied by the court.
Explain the significance of CPR 40.6 / 40B PD 3 in relation to consent orders.
CPR 40.6 / 40B PD 3 outlines that a consent order indicates the parties’ agreement on terms, eliminating the need for court arguments.
What is the role of a court in relation to a consent order?
The court’s role is limited in relation to a consent order, as it typically does not interfere with the agreement between the parties.
Define a Tomlin Order.
A Tomlin Order is a type of consent order used in legal settlements, consisting of a public part and a confidential part that details the agreement between the parties.
Describe the two parts of a Tomlin Order.
A Tomlin Order consists of a public part and a confidential part, where the public part outlines the general agreement and the confidential part contains the specific details of the settlement.
When might parties choose to use a Tomlin Order?
Parties may choose a Tomlin Order when they want key settlement terms to remain confidential or when the agreed terms exceed what a court could normally order.
Do Tomlin Orders allow for terms beyond court orders?
Yes, Tomlin Orders can include settlement terms that go beyond what a court could typically order as part of the proceedings.
What is the nature of the ‘Schedule’ in a consent agreement?
The ‘Schedule’ is generally confidential and contains terms of agreement that are enforceable with a further court order, allowing parties to include provisions beyond those a court could order.
How must directions for payment of money be included in a consent agreement?
Any direction for payment of money or the payment and/or assessment of costs must be contained in Part 1, the main body of the order, as these require action by the court and must be included in the public part of the order.
Explain the process when a settlement is reached during a stay of the claim.
If a settlement is reached while the claim is stayed, the application for the consent or Tomlin Order is treated as an application to lift the stay.
What is required for a consent or Tomlin Order to be effective?
A consent or Tomlin Order requires the court’s approval to be effective.
How does a consent or Tomlin Order affect the status of a legal claim?
Once approved by the court, a consent or Tomlin Order takes effect and can resolve the legal claim as agreed by the parties.
How should a settlement agreement be drafted?
A settlement agreement needs to be very carefully drafted to ensure it accurately reflects the parties’ agreement.
What happens if parties resolve their dispute without issuing proceedings?
If parties resolve their dispute without issuing proceedings, there is no need for a consent order or a Tomlin order.
Define a consent order in the context of interim applications.
A consent order is a formal agreement recorded in writing that reflects the parties’ agreement, such as an extension of time, which is then filed with the court.
What steps should be taken if a claimant needs an extension longer than 28 days to exchange witness statements?
The claimant should make an application to court, draw up a consent order for the agreed extension, file it at court, and invite the court to consider the application on paper.
Who can discontinue a claim?
Only a claimant can discontinue a claim.
What are the two major consequences of discontinuance?
- It ends the proceedings in relation to the claim or part of the claim discontinued. 2. The claimant is liable to pay the defendant’s costs up to the point of discontinuance.
What happens to the claimant’s liability for costs if only part of a claim is discontinued?
If the claim is only discontinued in part, the claimant is only liable for costs in relation to the part which is discontinued.
In what circumstances does a claimant need the court’s permission to discontinue proceedings?
A claimant needs the court’s permission to discontinue proceedings in exceptional circumstances, generally when they have already received some sort of remedy.
What is the procedure for discontinuance?
- File a notice of discontinuance at court
- Serve a copy on every party.
- Discontinuance takes effect from the date of service
- Upon discontinuance, a costs order is deemed to have been made in the defendant’s favour on the standard basis
