Settlement, Part 36 & ADR Flashcards
What is a Part 36 offer?
An offer to settle made in accordance with the procedural rules of Part 36, rather than the ordinary rules of offer and acceptance. Made without prejudice save as to costs. It can be made by either party at any stage in the proceedings (including before issue).
What are the requirements for a valid Part 36 offer?
- In writing
- Clearly made in pursuit of CPR Part 36
- Sets out a time period of not less than 21 days within which the defendant will be liable for the claimant’s costs
- Sets out whether it relates to part / whole of claim and counterclaim.
Where it is the defendant making the offer, it must also include:
* Offer to pay a single sum of money within 14 days (or longer if accepted by the claimant).
How is a Part 36 offer served?
Deemed served in accordance with the rules for service (same day if instant or next business day if after 4:30pm; 2 business days afterwards if non-instant).
Offeree can seek clarification of terms within 7 days of service.
In what circumstances can a Part 36 offer be withdrawn?
- Automatically according to its terms after certain time;
- If relevant period has expired OR trial has started, court permission required.
When is the court likely to give permission to withdraw a Part 36 offer?
Where it is in the interests of justice and there has been a change in circumstances since the making of the offer.
When does withdrawal take effect?
If during the relevant period, only at the end of the relevant period.
For how long does a Part 36 offer remain open for acceptance?
Remains open for acceptance unless it is withdrawn (even after the relevant period has expired).
What are the consequences of accepting a Part 36 offer?
- Claim stayed and does not continue to trial (unless only part of claim);
- Where offer includes payment, the party paying has 14 days from acceptance to pay unless otherwise agreed in writing. Failure to pay means other party can enter judgment without starting separate proceedings.
Costs Consequences
* If accepted before expiry of relevant period: Regardless of which party made offer, claimant awarded costs from start of relevant period to date offer accepted to reflect “win”.
* If accepted after expiry of relevant period: Defendant pays claimant’s costs up to date relevant period expired + offeree to pay offeror’s costs from date of expiry to date of acceptance.
What are the consequences of failing to accept a Part 36 offer where D made the offer?
Where C is awarded the same as or more than D’s offer = no consequences
Where C awarded less than Ds offer:
unless the court considers it unjust, C must pay Ds costs + interest from the end of the relevant period up to the trial.
D likely to be ordered to pay Cs costs for relevant period to reflect win.
What are the consequences of failing to accept a Part 36 offer where C made the offer?
Where C is awarded less at trial = no consequences
Where C is awarded the same or more at trial:
* D to pay C’s costs and interests from end of relevant period to trial on indemnity basis;
* Interest on costs at maximum of 10% base rate
* Interest on award at max 10% above base rate for some or all of the time post-relevant period;
* Additional amount based on award (10% up to £500k, 5% above £500k, maximum £75k total)
Where it is not a money claim, the additional amount is calculated using costs awarded.
In what circumstances are there no Part 36 consequences?
- Where an amount lower than the relevant offer sum is awarded at trial;
- Where the offer is made less than 21 days before trial
- Offer rejected and proceedings never go to trial
What is a calderbank offer?
An offer to settle made usually in writing and without prejudice save as to costs (i.e court does not know of the offer until it comes to assessing costs).
Court will consider offer when exercising discretion as to costs.
What is a standard consent order?
A standard consent is a public document which sets out an agreement between the parties as to their settlement (or other matters, such as an agreement to extend the deadline for an interim application). It might be a contract (court unlikely to interfere) or not (court more likely to interfere). The court must approve the consent order.
What is a tomlin order?
Comprised of 2 parts:
Part 1: public document following the same rules as the standard consent order.
Part 2: confidential, can include orders that the court itself could not pass. Takes effect without further order of the court.
What is discontinuance?
Discontinuance is where the claimant ends the case and settlement is not an option (i.e claimant realises they have a weak case). May be discontinued at any time. In exceptional circumstances, permission is required (i.e where one party has already obtained a remedy).
