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Welcome to our second Blog in the series.
Today we will be concentrating on Part 36 offers and their consequences as requested by a number of readers.
As promised, we will not baffle you with technical jargon, this is designed for people who are new to the world of law and costs, to give a brief overview of the important points to consider, however, if you feel after reading this that you would like further clarification or training then please get in touch and we will be more than happy to help.
Let’s start by discussing the different types of offer open to the parties.
The most common offer will be one made ‘Without Prejudice’ or sometimes known as ‘Calderbank offers’, essentially this is an offer of settlement which carry’s no real consequences and is often considered a safe option as it cannot be considered by a Judge without permission and will therefore not prejudice either party.
The second type of offer is an ‘Open’ offer, as the name suggests this is made in open correspondence and is therefore available to a Judge without the need for permission and so can in theory prejudice a party.
The third, and the subject of this Blog, is what are known as ‘Part 36’ offers.
As the name suggests these offers are governed by the rules found in CPR Part 36.
They are used to put pressure onto your opponent as there are strict time limits and consequences involved.
What makes a Part 36 offer?
CPR 36.5 sets out the form and content of a Part 36 offer:
A Part 36 offer must:
Be in writing;
Make it clear that the offer is made pursuant to Part 36;
Specify a period of not less than 21 days (‘relevant period’) for acceptance (unless the offer is made within 21 days before trial);
State whether it relates to the whole claim or only part of the claim and if so what part;
State whether it takes into account any counter claim;
Any Part 36 offer must be inclusive of interest.
Costs consequences of accepting a Part 36 offer (CPR 36.13):
If a Part 36 offer is accepted within the 21 day period specified above, then the Defendant will pay the Claimant’s costs up to the date of acceptance, to be assessed on the Standard Basis if not agreed.
Costs Consequences of not accepting a Part 36 offer and the matter proceeding to trial and subsequent judgment:
This is where the effects of a Part 36 offer can really be felt.
If the Defendant does not accept the offer, and the Claimant obtains a judgment which is equal to or more advantageous than the offer, then the Claimant can rely on CPR 36.17. In other words, the Claimant can seek an order in the following terms:
The Defendant to pay the Claimant’s costs up to the expiry of the relevant period (on the Standard Basis).
The Defendant to pay the Claimant’s costs on the indemnity basis from the date on which the relevant period expired, with interest on those costs of up to 10% above base rate and interest on the whole or part of any sum awarded at up to 10% above base rate for some or all of the period starting from the same date.
An additional amount of 10% of the first £500,000 awarded by the Court OR 10% of the first £500,000 and 5% of any amount above that figure of the costs awarded by the Court up to a maximum of £75,000.
Should the Defendant beat the Claimant’s Part 36 offer then the Claimant will be entitled to their costs on the Standard Basis up to the end of the relevant period, and thereafter the Defendant shall be entitled to their costs, payable by the Claimant from the date of the expiry of the relevant period.
Well that sit for now, there is of course a lot more that could be said and before making a Part 36 offer we advise that you consider the provisions under CPR Part 36 for yourself and feel free to contact us if you have any questions on this subject.
Our next Blog on 1st October will be on Retainers and Funding. Thank you for taking the time to read this Blog if you have any questions then please feel free to contact us on:
Email: swaters@waterslegalcosts.com
Tel: 07710391848
Or visit our website where we have a chat feature www.waterslegalcosts.com.
