The Utility Of Part 36 Offers

• Published date: 20 November 2023
• Subject Matter: Litigation, Mediation & Arbitration, Court Procedure, Trials & Appeals & Compensation, Civil Law
• Law Firm: Barton Legal
• Author: Mr Bill Barton

Have you ever been involved in a Court battle and wondered how do you put pressure on the other party to settle?

Are you confident enough in your arguments but you are in a position where you want to try and resolve the matter?

If the above does apply to you, you will want to consider making a 'Part 36 offer' to the other side.

What is a Part 36 offer and why would you make this offer?

A Part 36 offer derives its name from Rule 36 of the Civil Procedure Rules ('CPR'), which apply to Court proceedings. The initial advantage of making a Part 36 offer during Court proceedings is that it is an offer which is recognised and regulated by the Court. As a result, how to provide this type of offer and the consequences of it are more certain.

CPR 36.5 provides the minimum criteria for how a Part 36 offer must be set out. Under this sub-section, the offer must:

1. Be in writing;
2. State it is made in accordance with CPR 36;
3. Refer to a period of not less than 21 days (the 'Relevant Period'). If the offer is accepted within this period, the accepting party will be liable for the offering party's costs up until the date it is accepted;
4. Make it clear whether it is an offer to settle all that is being claimed or only part of the claim (and, if it is a partial settlement, which part); and
5. If applicable, state whether it is an attempt to settle any counterclaim(s).

As this form of offer is recognised and regulated by the Court, there are codified consequences if an offer is not accepted and the offering party is 'successful' at Trial.

Cost consequences if the offer is accepted within the Relevant Period

If an offer is accepted within the Relevant Period, then the party expected to pay under the offer must pay the amount offered within 14 days of accepting the offer.

The claimant is also entitled to payment of the costs of its proceedings up until the offer is accepted; this includes costs incurred before the Court proceedings were issued and incurred in line with the Pre-Action Protocol.

CPR 36 does not provide for the Defendant to have its costs paid if an offer is accepted during the relevant period.

Cost consequences if a Defendant makes an offer to a Claimant

If the Defendant makes a Part 36 offer, which is rejected, and either the claim is dismissed by the Court or the Court finds that a sum is owed to the Claimant which is the same or lower than the Part 36 offer, then the Court will make the following costs order:

1. The Defendant is entitled to the costs it incurred...