Disputes - Is a Part 36 Offer right for me?

 

What is a Part 36 Offer?

A Part 36 Offer is a type of settlement offer made under Part 36 of the Civil Procedure Rules (“CPR”). It can be made by either party without the admission of liability, in the interest of settling the Claim. Unfortunately, a Part 36 Offer cannot be used in a Small Claims matter, however, there are other types of settlement offers available - such as Calderbank offers often known as Without Prejudice Save as to Costs Offers. The key difference between these types of settlement offers is that a Part 36 Offer has automatic cost consequences for the party who makes, accepts or rejects an offer. These costs consequences are set out in CPR 36. A Part 36 Offer once made is treated as a “Without Prejudice Save as to Costs” offer which makes the offer confidential and only disclosed to a Court when dealing with the issue of costs.

As either party can make an offer, the parties will be referred to as an ‘Offeror’ or ‘Offeree’ rather than a Claimant of Defendant

Terms	Definitions
Offeror	The party who makes an offer is the “Offeror”.
Offeree	The party to whom an offer is made is the “Offeree”.
Small Claims Track	Claims that are less than £10,000.00 in value. Click here for more info.
Fast Track and Multi Track Claims	Claims between £10,000 to £25,000 in value are usually considered Fast Track Claims, and any claims above £25,000 in value and are complex in nature are allocated to the Multi Track. Click here for more info.

 

The Law Society recently released data stating that Small Claims were taking over 51 weeks to be heard in Court and FastTrack or MultiTrack claims are taking over 70 weeks. Litigation is often both a lengthy and costly resolution, hence why settling your claim without the need for attending Court will often work in your favour. Furthermore, due to the current Pandemic, the Courts have had a lack of Judiciary staff meaning that Court Hearings can often be adjourned with as little as 24 hours’ notice.

What happens when I make a Part 36 Offer?

You must ensure that your offer is reasonable, set out in writing and is clear whether it is to settle the whole claim or part of it. The Part 36 offer must be open for acceptance for a period of no less than 21 days from the date of service. The Offeree will then have the choice to accept or reject the offer, seek clarification on the offer or alternatively, they may respond with a counteroffer.

Cost implications

The costs consequences will depend on when you accept the Claimant’s or the Defendant’s Part 36 offer.

• If the offer is made by the Defendant and the Claimant as the Offeree rejects the Part 36 Offer and proceeds to obtain a judgment that IS more advantageous than the initial offer, the Defendant is liable to pay for the Claimant’s costs. However, if having rejected  the Part 36 Offer, the Claimant as the Offeree proceeds to obtain a judgment that IS NOT more advantageous than the initial offer, then the Claimant is liable to pay for the Defendant’s costs from the date that the offer period expired, plus interest.
  
  
• If the offer is made by the Claimant and the Defendant as the Offeree rejects the Part 36 Offer and the Claimant proceeds to obtain a judgment that IS more advantageous than the initial offer, the Defendant will be liable to pay the Claimant’s costs on an indemnity basis from the date that the offer period expired plus interest. They will also be liable for the Claimant’s reasonable costs from the beginning of the claim, plus interest.

The Court has wide discretion over costs and can penalise either party, regardless of who is successful, if they have not conducted their litigation in an appropriate manner. This is why considering alternative dispute resolution throughout a dispute is key!

Please remember that even where the Claimant or Defendant is ordered to pay costs, you are responsible for settling your own legal costs. As a Client of our firm you will have to settle your invoices for your own legal costs, as and when they fall due  as there is no guarantee that you will be able to recuperate all of the money that you have spent on this process even if you are successful.

Is a Part 36 Offer right for me?

If you are looking to resolve your dispute amicably without the additional costs of proceeding to Court, a Part 36 Offer may be suitable for you, especially where you want to put some pressure on the opponent. Remember, either party can make a settlement offer and making one does not make you look guilty or weak in your case. The thought of attending Court can often put a lot of stress on either party and under the current circumstances, where hearings that are listed may not proceed, it is best to consider all the available options.

Our Dispute Resolution team at Lawson West Solicitors is keen to assist you in resolving your dispute in the manner best suited to you and your matter.

For further information about Part 36 Offers, please contact a member of the Dispute Resolution Team here at Lawson West Solicitors.

 

 

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