Settlement, ADR, discontinuance Flashcards
Who and when can make a part 36 offer?
Part 36 offers can be made at any stage of proceedings, including before proceedings are issued.
A Part 36 offer can be made by either party
How to make a part 36 offer
Part 36 offer must:
Be in writing;
Make clear it is made pursuant to Part 36;
Specify a period of not less than 21 days within which the defendant will be liable for the claimant’s costs if the offer is accepted (called the ‘relevant period’);
State whether it relates to the whole or part of the claim; and
State whether it takes into account any counterclaim.
There are two further rules that apply to defendants’ offers only (CPR 36.6):
With limited exceptions, a Part 36 offer by a defendant to pay a sum of money in settlement of a claim must be an offer to pay a single sum of money.
A defendant’s offer that includes an offer to pay all or part of the sum at a date later than 14 days following the date of acceptance will not be treated as a Part 36 offer unless the offeree accepts the offer.
How to clarify a Part 36 offer and when?
The offeree can seek clarification of the terms of the offer, for example a breakdown of the components of the offer, within 7 days of service
How to withdraw a Part 36 offer?
If the offer has already been accepted… it cannot be withdrawn, or its terms changed
If the trial has already started…the court’s permission is required to withdraw the offer.
If the relevant period expired -> the offer can be withdrawn or its terms changed without the court’s permission
If relevant period hasn’t expired -> Any notice of withdrawal / 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. If they do serve notice of acceptance during the relevant period (despite the notice of withdrawal / change) then the offeror can either allow the acceptance or 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. The court may give permission for the original offer to be withdrawn or its terms changed if satisfied that there has been a change of circumstances since the making of the original offer and that it is in the interests of justice to give permission.
How to accept Part 36 offer
Serve written notice of acceptance on the offeror
If the case is issued the acceptance also needs to be filed at court.
There is no prescribed form for this - a letter will be sufficient.
Important: 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.
Consequences of accepting a Part 36 offer
Stay - the claim will be stayed and will not continue to trial
Settlement sum - D has 14 days from acceptance to pay the settlement amount agreed unless otherwise agreed in writing
Costs
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
If accepted after expiry of the relevant period, then:
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—
the claimant be awarded costs up to the date the relevant period expired; and
the offeree do pay the offeror’s costs for the period from the date of expiry of the relevant period to the date of acceptance.
where an offeree accepts an offer but the offer was made less than 21 days before trial - if the parties do not agree liability for costs the court must determine liability
Consequences of unaccepted part 36 offer - D’s offer not accepted
Trigger:
A claimant fails to obtain a judgment more advantageous than a defendant’s part 36 offer (in terms of money)
So if C wins the same or less than offered by D -> then trigger is met and there will be consequences
Consequences
The penalty imposed on the claimant in these circumstances is that unless it considers it unjust to do so, the court must order that:
The claimant pays the defendant’s costs from the date the relevant period expired; and
Interest on those costs
Do part 36 consequences apply if an offer was made within 21 days before the trial?
Where an offer was made within 21 days of the trial, then even if the applicable ‘trigger’ set out above is satisfied, there will be no Part 36 consequences unless the court abridges the relevant period ie shortens it.
Mediation
The mediator has no authority to make any decision which is binding on the parties
Arbitration
impartial adjudicator whose decision the parties to the dispute have agreed will be final and binding
Med-arb
Med-arb (mediation/arbitration) is a process whereby parties agree that, initially, they will try to resolve any dispute by mediation. In the event that this does not result in satisfactory resolution of the matter, the matter will move on to an arbitration pursuant to which a binding determination will be made.
Early neutral evaluation/expert appraisal/expert evaluation
These terms all refer to processes where an independent party is appointed by the parties. The independent party will provide a non-binding assessment of the matter(s) referred to it.
Expert determination
Expert determination is where an independent expert on the subject matter is appointed by the parties to determine the dispute.
Expert determination: the expert does give a binding decision.
Timing of arbitration
arbitration is an alternative to court proceedings, and therefore will almost always be pursued before any court proceedings have been commenced.
Costs consequences of refusing ADR
silence in the face of an offer to engage in ADR is likely to be considered unreasonable and to be sanctioned in costs
If a party refuses to engage in ADR then when it comes to assessing costs the court will consider whether that refusal was reasonable, and if not, the court might impose a costs penalty. The burden of proof will be on the unsuccessful party to show the court why it should depart from the general rule on costs to deprive the successful party of some or all of its costs on the grounds that it refused to agree to ADR.
No cost consequences for failing to suggest ADR
Discontinuance - what is it? Who can do it? when?
Only a claimant can discontinue a claim. The claimant can do so at any time – the claimant is choosing not to pursue the claim against the defendant any further
The claimant can discontinue part of a claim rather than the whole claim
The claimant can choose to discontinue the claim against only one defendant, or against all of the defendants
Consequences of discontinuance
It ends the proceedings in relation to the claim / part of claim discontinued
The claimant is liable to pay the defendant’s costs up to the point of discontinuance, unless the court orders otherwise
Procedure for discontinuance
File a notice of discontinuance at court (This must make clear which part of the claim is discontinued (if only part)).
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
