Get in touch
To contact us, please fill out this form and we will get back in touch as soon as possible. Your personal data will be processed in accordance with our privacy policy which can be found here.
Part 36 offers can provide parties to litigation significant benefits in respect of costs, whether they are accepted or not. But do those costs benefits always apply? Recent developments would suggest not.
A ‘Part 36 offer’ is a settlement offer made under Part 36 of the Civil Procedure Rules (CPR) and can carry cost benefits – or risks, depending which side of the offer you are on.
An offer can be made by either the Claimant or Defendant, and at any time (although there are certain rules regarding their efficacy before proceedings are issued, or their acceptance during a trial). They are made ‘without prejudice save as to costs’ and therefore a court cannot consider Part 36 offers until liability and quantum has been decided and the issue of costs arises.
Whilst the consequences of a part 36 offer (whether made by Claimant or Defendant) are somewhat complicated, they can be broadly summarised as thus:
However, the court will only impose the cost consequences if they consider it fair to do so. When considering this, the court will look at when the offer was made, the terms of the offer, information available to the parties at the time the offer was made and the conduct of the parties.
The Birmingham County Court heard a RTA case and judgment was granted for the claimant. Prior to the trial, the claimant had made a Part 36 offer to settle on 99.999% of the sum claimed. This worked out to be a 7p discount on the full value of the claim.
The court did not consider the claimant’s offer to be a genuine attempt to settle and rather just an attempt to receive the cost benefits of a Part 36 offer. The court did not allow the claimant to benefit from the part 36 cost consequences. The defendant was ordered to pay costs on the standard basis and no interest or indemnity costs were added.
As such, the offer must be a ‘genuine attempt to settle’. Whilst it is tempting to look at the percentage discount, and this will be a factor, it is not necessarily conclusive.
In the case of Rawbank SA v Travelex Banknotes Ltd a Part 36 offer of 99.7% of the total claim was held to be a genuine attempt to settle, but this 0.3% amounted to a discount of £150,000.
Clearly then, the context of the offers are important. Given the potential benefit in making, or risks in receiving, part 36 offers, it is important that parties get them right.
If you would like some advice regarding an offer that you have received, please contact the dispute resolution team who will be able to advise you.
The information on this site about legal matters is provided as a general guide only. Although we try to ensure that all of the information on this site is accurate and up to date, this cannot be guaranteed. The information on this site should not be relied upon or construed as constituting legal advice and Howes Percival LLP disclaims liability in relation to its use. You should seek appropriate legal advice before taking or refraining from taking any action.
To contact us, please fill out this form and we will get back in touch as soon as possible. Your personal data will be processed in accordance with our privacy policy which can be found here.