#10348 - Part 36 - BPC Civil Litigation

PART 36 OFFERS

• definition

  • an offer made in accordance with part 36

• privilege

  • part 36 offer itself is WP save as to costs

• interest

  • part 36 offers are inclusive of interest

• applicability of rules of contract law

  • part 36 = self-contained code, rules of contract NOT relevant unless clearly intended to be (Gibbons v Manchester CC)

  • effect: part 36 partially governed by contract law:

    • if accepted within relevant period = contract settling in terms of offer

    • BUT rejecting offer / making counter offer does NOT prevent offeree later accepting original offer (unless expressly revoked)

• scope

  • parties NOT obliged to use part 36 format for settlement offer

  • BUT if offer not made in accordance with r36.2, will NOT have consequences of a part 36 offer (r36.1(2))

• advising whether to accept / reject part 36 offer

  • must ensure client fully informed of costs consequences

DEFENCE OF TENDER BEFORE CLAIM

• when files defence D wishing to rely must make payment into court of amount said to have been tendered (r37.2, Greening v Williams)

• money may NOT be paid out without court's permission except where it is accepted without needing permission AND D agrees sum in court can be used to satisfy the offer (r37.3)

• rule that part 36 offers are WP save as to costs does NOT apply (r36.13(3))

THE PART 36 OFFER

• when?

  • may make at any time including before commencement AND in appeal proceedings (r36.3(2))

• form and content

  • offer must:

    1. be in writing (r36.2(2)(a))

       1. may make in letter

       2. form N242A preferable (PD 36A para 1.1)

    2. state on its face intended to have consequences of part 36 (r36.2(2)(b))

    3. specify the relevant period (only if offer made at least 21 days before trial) (r36.2(2)(c), 36.2(3)) - see below

    4. state whether relates to:

       1. whole claim; or

       2. part of claim + which part; or

       3. issue in claim + which issue (r36.2(2)(d))

N.B. offer may relate solely to liability (r36.2(5))

5. state whether takes into account any counterclaim (r36.2(2)(e))

• terms of the proposed compromise:

  1. sufficiently precise and certain

  2. clear on whether offer = 'full and final settlement' of all / some issues'

  3. clear on whether takes into account e.g. cross claim, previous interim payment

  4. costs consequences of acceptance

• the relevant period

  • if offer made at least 21 days (21 days or more) before trial

    • = period of not less than 21 days within which D will be liable for C's costs in accordance with r36.10 if offer accepted (r36.2(3), r36.2(2)(c))

  • if offer made less than 21 days before trial (need NOT specify in offer)

    • = period up to end of trial OR such other period as court may determine (r36.3(1)(c)(ii)) i.e. extended

  • extending the relevant period

    1. ask offeror to consent to extension (r36.3(c)(ii))

    2. failing consent apply to extend time under r3.1(2)(a) (Martin v Randall)

• additional formalities in certain claims

  • PI

    • offer must:

      1. where part 36 offer = compensation payments to Cs - comply with requirements in r36.15 re: recovery of state benefits under Social Security (Recovery of State Benefits) Act

         • before making offer, apply for certificate of recoverable benefits

         • state:

           1. whether offer made without regard to liability for recoverable amounts OR whether includes them

           2. gross compensation (i.e. before deduction)

           3. name + amount of deductible amount

           4. net compensation (i.e. after deduction)

      2. if claim for future pecuniary loss

         • can be lump sum, periodical payments or combo

         • must state which part is lump sum and which part is periodical payments (and how continuity of payment to be ensured)

      3. if claim for provisional damages

         • specify whether includes provisional damages

         • state sum offered on assumption C will NOT develop disease specified

         • that C must claim for further damages within specified limited period

  • offers made by Ds in money claims

    • must be offer to pay single sum (r36.4(1))

    • offer to pay all / part of sum at date later than 14 days after any acceptance part 36 offer unless accepted (r36.4(2))

    • single sum treated as inclusive of all interest to end of relevant period (r36.3(3))

• defects in formalities

  • minor defects correct under r3.10 (Hertsmere PCT)

  • significant departure part 36 offer

  • following part 36 offers:

    1. failure to state offer intended to have part 36 consequences + failure to state relevant period (Gibbon)

    2. time-limited offer (C v D)

  • determining defectiveness

    • interpret offer as would be read by reasonable solicitor (Onay v Brown)

    • if possible, read in a way that makes offer compatible with part 36 e.g. 'open for 21 days' read as 'won't be withdrawn in first 21 days' (NOT withdrawn after 21 days) (C v D)

• clarification of terms

  • if terms unclear, offeree may ask offeror to clarify (r36.8(1))

  • procedure

    1. make request within 7 days of service of offer (r36.8(1))

    2. offereor should respond within 7 days of receiving request (r36.8(2))

    3. if offeror doesn't respond offeree may apply for order that he complies (unless the trial has started) (r36.8(2))

  1. order must specify date when part 36 offer treated as having been made (r36.8(3))

• who to serve offer on + how

  • offeree

  • if legally represented, must serve on legal rep (PD 36A para 1.2)

  • use prescribed method of service in r6.20

• time when offer made

  • made when offer served on offeree (r36.7(1))

ACCEPTANCE OF A PART 36 OFFER

• how?

  • general rule

    • DON'T need court's permission, simply written notice

    • written notice of acceptance

1. serve on offeror (r36.9(1))

2. file notice of acceptance with court (PD 36A para 3.1)

   • if PI claim

     • periodical payments - C must apply to court for order for award of damages in form of periodical payments within 7 days of acceptance

     • provisional damages - C must apply to court for order for award of provisionao damages 7 days of acceptance

   • cases where court's permission required: (r36.9(3))

1. offer made by some - but NOT all - of multiple Ds and 36.12(4) applies (r36.9(3)(a)) - see below

2. claim is for PI damages, offer includes any deductible amounts AND since date of offer, deductible benefits / deductible lump sum paid to C (r36.9(3)(b))

   1. the application

      • must state:

        • net amount of part 36 offer; +

        • deductible amounts accrued at date of offer + subsequently

      • must include copy of current certificate of recoverable amounts (PD 36A para 3.3)

3. apportionment required for Fatal Accident Act claims (r41.3A, r36.9(3)(c))

4. the trial has started (r36.9(3)(d) - see below

5. any party is child / pp (r21.10)

• time for acceptance + costs consequences

  • may be accepted at any time before service of notice of withdrawal, even if subsequent offers made (r36.9(2))

  • offer made 21 or more days before trial AND accepted WITHIN relevant period

    • AUTOMATIC costs consequences of r36.10

      • C entitled to 100% of standard-basis costs up to date of notice of acceptance from D + court CANNOT order payment of only a proportion (r36.10(1), (3), Lahey v Pirelli)

  • offer made LESS THAN 21 days before trial AND accepted

    • parties entitled to agree liability for costs (r36.10(4)(a))

    • BUT if DON'T court will make an order for costs (r36.10(4)(a))

  • offer made 21 or more days before trial AND accepted OUTSIDE the relevant period

    • parties entitled to agree liability for costs (r36.10(4)(b))

    • BUT if DON'T court will make an order for costs (r36.10(4)(b)):

      • the usual costs order (unless court orders otherwise)

        • C entitled to standard-basis costs up to expiry of relevant period AND offeree liable for offeror's costs for period from expiry of relevant period - acceptance (r36.10(5))

        • acceptance of C's offer to settle: as above, BUT possibly with enhanced interest on costs after expiry of relevant period (Fitzpatrick v Tyco)

      • departure from the usual costs order

        • court may make other order for costs only if there is some fact rendering it unjust for C to pay D's costs after expiry of relevant period (r36.10(5), Matthews v Metal)

    • acceptance after trial has started

      • only effective with court's permission (r36.9(3)(d))

    • acceptance after end of trial but before judgment

      • only effective if parties agree (r36.9(5))

• special cases

  • acceptance relating to part of the claim

    • if C abandons the balance at time of serving notice of acceptance

      • claim settled; +

      • C entitled to costs up to date of serving notice of acceptance (unless court orders otherwise) (r36.10(2))

    • if C does NOT abandon balance

      • that part goes to trial; +

      • court has discretion on costs of settled part

  • acceptance of offer made by 1+ but NOT all multiple Ds

    • accept WITHOUT permission in following in situations

1. Ds sued jointly / in the alternative, C may accept offer IF he discounts his claim against Ds NOT making the offer AND those Ds give written consent to the acceptance of the offer (r36.12(2))

2. C alleges Ds have several liability, C may accept the offer AND continue with claims against other Ds if entitled to do so (r36.12(3))

   • NEED permission if (a) or (b) does NOT apply (r36.12(4))

• effect of acceptance: stay

  • if part 36 offer accepted, claim will be stayed (r36.11(1)):

    • part 36 offer relates to whole claim stay on terms of offer (r36.11(2))

    • part 36 offer relates to part of claim stay as to that part only on terms of offer AND costs liability decided by court unless parties have agreed costs (r36.11(3))

  • does NOT affect court's power to enforce terms of offer / deal with question of costs or interest relating to proceedings (r36.11(5))

• time for payment upon acceptance

  • must pay within 14 days of acceptance (r36.11(6)(a))

  • if NOT within 14 days part 36 offer need to be good for money

REJECTIONS, COUNTER-OFFER AND...