Part 36 Offers ' Tactical Weaponry Or Tool For Settlement?

• Published date: 20 July 2023
• Subject Matter: Litigation, Mediation & Arbitration, Trials & Appeals & Compensation, Civil Law
• Law Firm: Blaser Mills
• Author: Mr Jade Salton-Brooks

Part 36 of the Civil Procedure Rules ("CPR") sets out a self-contained procedural 'code' for offers made in accordance with its provisions, so called 'Part 36 offers'.

Part 36 offers can be a useful tactical tool in a Claimant's armory. If a Defendant fails to 'beat' a Part 36 offer at trial, automatic cost consequences flow, which entitle a Claimant to an award of costs, far in excess of any cost order that would be made on a standard basis. The consequences of a Part 36 offer begin from the relevant period, which must be at least 21 days from the date of the Part 36 offer.

CPR 36.17(3) provides that a Court must, unless it considers it unjust to do so, order that the Claimant is entitled to costs on the following basis:-

• interest on the whole or part of any sum of money awarded, at a rate not exceeding 10% above base rate for the period starting with the date on which the relevant period expired;
• costs (including any recoverable pre-action costs) on the indemnity basis from the date on which the relevant period expired;
• interest on those costs at a rate not exceeding 10% above base rate; and
• an additional amount, which shall not exceed '75,000 calculated either as (i) for awards of up to '500,000, 10% of the amount awarded (ii) for awards in excess of '500,000, 10% of the first '500,000 and 5% of any amount above that figure subject to the limit of '75,000.

In considering whether it would be 'unjust' to make such an order, the Court must take into account all of the circumstances of the case including:-

• the terms of any Part 36 offer;
• the stage in the proceedings when any Part 36 offer was made including in particular how long before the trial started the offer was made;
• the information available to the parties at the time when the Part 36 offer was made;
• the conduct of the parties with regard to the giving of or refusal to give information for the purposes of enabling the offer to be made or evaluated; and
• whether the offer was a genuine attempt to settle the proceedings.

The recent case of Yieldpoint Stable Value Fund, LP v Kimura Commodity Trade Finance Fund Ltd[2023] EWHC 1512 (Comm), has put these considerations in the spotlight.

The Claimant sought...