Offer to Settle Part 36:
The 56th Amendment to the Civil Procedural Rules came into force on the 01st October 2011. The Amendment provided a welcomed clarification ending the confusion which had been caused by the decision in Carver v BAA Plc (2008). The amendment also introduces the recommendations suggested by Lord Justice Jackson in his report on civil costs.
A summary of the offer to settle Part 36 procedure is detailed below. The Rules are complicated and it is necessary to read the Rules and Practice Directions in full to understand them. Part 36 is an important tool in any civil claim it is a useful way of settling a number of issues including liability, contributory negligence, damages and even costs.
Form and Content of a Part 36 Offer:
An offer to settle must be made:
- In writing;
- State that it is to have the consequences of section 1 of Part 36 of the Civil Procedural Rules;
- Specify a period of not less than 21 days within which the Defendant will be liable to pay the Claimant’s costs in accordance with the rule 36.10, if the offer is accepted;
- State whether the offer relates to the whole of the claim; or part of the claim; or an issue which arises within it and if so to which part or issue and;
- State whether it takes into account any counterclaim.
A party may within 7 days of the Part 36 Offer request clarification in writing, if the party does not receive the clarification, then it is open to that party to apply to the Court for an Order to do so.
Acceptance of a Part 36:
Part 36 Offer to settle must be accepted in writing and can be accepted without the Court’s permission provided that acceptance is not within 21 days of the Trial or the Trial has not started. The Defendant must then pay within 14 days the Part 36 Offer. If not the Claimant is able to enter judgment for that amount.
Cost Consequences of a Part 36 Offer:
If a Part 36 Offer is accepted the Claimant is entitled to the costs of the proceedings up to the date of acceptance.
Cost Consequences following Judgment:
Where a Judgment is entered and the Claimant fails to obtain a judgment more advantageous than the Defendants’ Part 36 or judgment for the Defendant is at least as advantageous to the Claimant then the Court, will unless it feels unjust to do so order that he Defendant is entitled to his costs from the date from which the relevant period expired and interest on those costs.
The clarification of 36.14 states “For the purpose of paragraphs 1(1) in relation to any money claim or any money element of a claim, “more advantageous” means better in money terms by any amount, however small, and “at least as advantageous” shall be construed accordingly.”
Amendment to the rules therefore reverses the decision in Carver it means that if you beat an offer by even 1p you are able to rely on the cost advantages of a Part 36