#19714 - 13 And 14. Bpc Civil Litigation 2023 2024 Settlement And Parties - BPC Civil Litigation

• This is subject to contractual principles. For there to be a binding agreement, there must be an offer which has been accepted, and the terms of the agreement must be sufficiently clear to be enforced. A binding agreement can only be reached by the parties, or individuals acting on behalf of each party with authority to settle.

• Enforcement will depend on the terms agreed and on the form in which the terms are recorded. A court will only enforce an agreement if the terms are clear.

• Joint Settlement Meetings:

  • Protected by without prejudice rule.

  • The parties and their lawyers are in separate rooms. Barristers from each side meet in a third room to hold without prejudice discussion and to exchange and discuss potential offers.

• The right to make a settlement by way of a Calderbank offer is preserved.

• This is made by letter written ‘without prejudice save to costs’ or ‘without prejudice’ but subject to an express reservation of the right to refer to the letter on the issue of costs should the claim proceed to judgment. It is not equated with a Part 36 offer.

General:

• A Part 36 offer may be made in respect of the whole, or part of, or any issues that arises in the claim, counterclaim or other additional claim, or an appeal or cross-appeal from a decision made at a trial.

Commentary:

• Parties are allowed to make offers to settle in whatever way they choose, but if not made in accordance with the Part 36 rules, it will not be treated as such.

• Where a party makes an offer that is intended to be a Part 36 offer but a point arises as to its construction, the court should prefer the construction, if possible, that would give effect to the stated intention and allow the offer to be effective.

• Except where a Part 36 offer is made in appeal proceedings, its costs are related to the proceedings in respect of which it is made, and not in relation to the costs of any appeal from a decision in those proceedings.

Form and content of a Part 36 offer:

• A Part 36 offer must:

  • Be in writing;

  • Make clear that it is made pursuant to Part 36;

  • Specify a period of not less than 21 days within which the defendant will be liable for the claimant’s cost if the offer is accepted (does not apply if the offer was made less than 21 days before the start of a trial);

  • State whether it relates to the whole of the claim or to part of it or to an issue that arises in it and if so to which part or issue; and

  • State whether it takes into account any counterclaim.

• If for personal injury claims to settle future pecuniary loss, offer to settle a claim for provision damages or to settle a deduction of benefits, the offer must contain further information.

• The offer will be treated as inclusive of interest until the date on which the period specified expires or 21 days after the offer was made.

• The Part 36 offer may make provision for the accrual of interest on such sum after the date specified. If it does not, it shall be treated as inclusive of all interested up to the date of acceptance if it is later accepted.

Guidance:

• An offer which does not comply with the mandatory requirements of r.36.5 will not attract the usual Pt 36 consequences, but the court will take such an offer into account when exercising its discretion as to costs.

• On offer to pay a global sum inclusive of costs is not compliant with Pt 36.

• An offer that excludes interest is not a Part 36 offer.

• The general rule is that Part 36 offers should be made at least 21 days before the start of a trial. Offers can be made personally but several consequences flow:

  • Permission will be required to accept the offer after the start of trial

  • There is no automatic costs order upon acceptance of a later offer; instead the court must decide the appropriate costs order if the parties cannot agree the liability for costs

  • Late offers do not attract the usual consequences upon judgment unless the court abridges time.

• Where there are joint claimants/defendants the offer cannot be accepted without the agreement of both and there must have been a parallel claim arising out of the same facts.

• A Part 36 offer may be made at any time and is made when it is served on the offeree.

Defendant’s offer:

• A Part 36 offer by a defendant to pay a sum of money in settlement of a claim must be an offer to pay a single sum of money.

• A defendant’s offer that includes an offer to pay all or part of the sum at a date later than 14 days following the date of acceptance will not be treated as a Part 36 offer unless the offeree accepts the offer.

Clarification of a Part 36 offer:

• The offeree may, within 7 days of the Part 36 offer being made, request the offeror to clarify the offer. If they do not, the offeree may, unless the trial has started, apply for an order that the offeror do so.

• If the court makes such an order, it must specify the date when the Part 36 offer is to be treated as having been made.

Withdrawing or changing the terms of a Part 36 offer generally:

• A Part 36 offer can only be withdrawn, or its terms changed, if the offeree has not previously served notice of acceptance.

• The offeror withdraws the offer or changes its terms by serving written notice of the withdrawal or change of terms on the offeree. Such notice takes effect when it is served.

• After expiry of the relevant period –

  • The offeror may withdraw the offer or change its terms without the permission of the court; or

  • The offer may be automatically withdrawn in accordance with its terms.

• Where the offeror changes the terms of a Part 36 offer to make it more advantageous to the offeree –

  • Such improved offer shall be treated, not as the withdrawal of the original offer; but as the making of a new Part 36 offer on the improved terms; and

  • The period specified under rule 36.5(1)(c) shall be 21 days or such longer period (if any) identified in the written notice.

Withdrawing or changing the terms of a Part 36 offer before the expiry of the relevant period:

• This rule applies where the offeror serves notice before expiry of the relevant period of withdrawal of the offer or change of its terms to be less advantageous to the offeree.

• Where this rule applies—

  • If the offeree has not served notice of acceptance of the original offer by the expiry of the relevant period, the offeror’s notice has effect on the expiry of that period; and

  • If the offeree serves notice of acceptance of the original offer before the expiry of the relevant period, that acceptance has effect unless the offeror applies to the court for permission to withdraw the offer or to change its terms—

    • Within 7 days of the offeree’s notice of acceptance; or

    • If earlier, before the first day of trial.

  • On application, the court may give permission for the original offer to be withdrawn or its terms changed if satisfied that there has been a change of circumstances since the making of the original offer and that it is in the interests of justice to give permission.

• A Part 36 offer is accepted by serving a written notice of acceptance on the offeror.

• It may be accepted at any time (whether or not the offeree has subsequently made a different offer), unless it has already been withdrawn.

• Permission is required where:

  • Multiple defendants;

  • The relevant period has expired and further deductible amounts have been paid to the claimant since the date of the offer;

  • An apportionment is required; or

  • A trial is in progress.

• Where the court gives permission, unless all the parties have agreed costs, the court must make an order that the claimant will be entitled to the costs of the proceedings (including their recoverable pre-action costs) up to the date on which notice of acceptance was served on the offeror.

  • The general rule is that, where a Part 36 offer is accepted within the relevant period, the claimant will be entitled to the costs of the proceedings up to the date on which notice of acceptance was served on the offeror.

  • There is no presumption that the court would order a late-accepting party to pay the other party’s costs on an indemnity basis.

• Where—

  • a Part 36 offer which was made less than 21 days before the start of a trial is accepted; or

  • a Part 36 offer which relates to the whole of the claim is accepted after expiry of the relevant period; or

    • Where the parties cannot agree liability as to costs, the court must, unless it consider it unjust to do so, order that–

      • The claimant be awarded costs up to the date on which the relevant period expired; and

      • The offeree does pay the offeror’s costs for the period from the date of expiry of the relevant period to the date of acceptance.

  • a Part 36 offer which does not relate to the whole of the claim is accepted at any time,

the liability for costs must be determined by the court unless the parties have agreed the costs

Other effects of acceptance of a Part 36 offer:

• If a Part 36 offer is accepted, the claim will be stayed.

  • If a Part 36 offer which relates to part only of the claim is accepted, the claim will be stayed as to that part upon the terms of the offer.

  • In the case of acceptance of a Part 36 offer which relates to the whole claim, the stay will be upon the terms of the offer.

• If the approval of the court is required before a settlement can be binding, any stay which would otherwise arise on the acceptance of a Part 36 offer...