Part 36 Civil Procedure Rules

The Part 36 Civil Procedure Rules are a set of rules that allow for a Claimant and Defendant to settle their claim without the Court’s involvement, or by the way of an order. Under Part 36.16 of the Civil Procedure Rules, all Part 36 Offers made will be made on a ‘without prejudice, save as to costs’ basis. Part 36 Offers don’t always have to be of monetary value, and they can be relating to aspects of the case, such as an offer on liability.

Both the Claimant or the Defendant of the claim can make a Part 36 Civil Procedure Rules offer. When, and if, a party goes on to accept the offer, the matter will be concluded and the issues between the parties resolved. The only issue outstanding would be the issues of costs. If the offer is rejected and the matter proceeds to Trial, there will be costs consequences if this offer cannot be beaten at Trial.

Part 36 Civil Procedure Rules offers can relate to the whole claim, part of a claim, a counterclaim, appeals and cross-appeals decisions made at Trial.

A Part 36 Offer to settle can be made at any time before a judgment is given by the Court on that issue. A Part 36 Offer can also be made before proceedings have been issued.

The Requirements of a Valid Part 36 Civil Procedure Rules Offer

The following requirements are listed in the Civil Procedure Rules:

• The Part 36 Offer to settle must be made in writing as per CPR 36.5(1) (a)
• It must clearly state that it is made in line with CPR 36
• It must provide a relevant period for the offer to remain open for acceptance. This is a period, not less than 21 days, where the Defendant will be liable for the Claimant’s costs
• The Part 36 Offer must state if it relates to the whole claim or part of the claim only
• It must also state if the offer takes into account any counterclaim.

There are a number of costs consequences that may apply if a Part 36 Offer is proposed within 21 days before a Trial.

A Part 36 Civil Procedure Rules offer can be withdrawn or changed if it has not been accepted. Written notice of the withdrawal or change must be served.

Accepting a Part 36 Civil Procedure Rules Offer

A party must accept a Part 36 Offer in writing as per CPR 36.11(1), and it must be accepted at any time while the offer remains valid. Where a few different offers have been made and not withdrawn, a party can accept any of these offers.

Costs Consequences when a Part 36 Offer is Accepted

The paying party (usually the Defendant) must pay the receiving party (usually the Claimant) within 14 days of the date of acceptance. Failure to do so allows the receiving party to seek a judgment.

• If the offer is accepted within the relevant period, the Claimant is entitled to recover its costs up to the date of acceptance as per CPR 36.13(1).
• If the offer is accepted outside of the relevant period, or the offer is made less than 21 days before the Trial is due to take place, the parties will agree liability on costs, or the Court will be required to make an order on costs.
• If a Defendant Part 36 Offer is accepted outside of the relevant period, the Claimant will be able to recover costs up until the date which the relevant period expired.
• If the parties have agreed liability but cannot agree on the amount of costs, they will be assessed by the Court at detailed assessment on a standard basis.

Costs Consequences at Trial When a Part 36 Offer is Not Accepted

Where the Claimant obtains a judgment that does not beat a Claimant’s Part 36 Offer but is equal to or better than the Defendant’s Part 36 Offers proposed, the Court will make an order on costs in the Claimant’s favour.

If the Claimant receives a judgment that beats the Claimant’s Part 36 Offer and the offer is made 21 days before Trial, the Court will make the following order unless it considers it unjust to do so:

• The Claimant will be awarded interest on the whole or party of the money awarded, at 10% above the base rate for some or all of the period from the expiry of the relevant period
• The Claimant will be able to recover its costs on the indemnity basis (which is a more generous assessment on costs than standard basis) from the date on which the relevant period expired.
• The Claimant is entitled to interest on those costs, again not exceeding 10% above the base rate
• The Claimant will also be abler to recover an additional amount of £75,000 maximum, which will be calculated on a percentage basis based on the amount of money awarded.

The Defendant will be required to pay the amounts mentioned above as a consequence of not accepting the Claimant’s reasonable offer and not beating the same at Trial.

On the other hand, where the Claimant fails to beat the Defendant’s offer proposed prior to Trial, the Claimant will be ordered to pay the Defendant’s costs from the date of expiry of the offer.

In considering what is just in making an order for costs, the Court will take into account a number of things, including the conduct of the parties during the case.

How Can ARC Costs Assist?

ARC Costs are expert Costs Draftsman and Costs Lawyers that regularly assist both receiving and paying parties in resolving costs disputes in the jurisdiction of England and Wales. Whether you find yourself being the receiving or paying party, we can assist with assist with preparation of your Costs Budget or Bill of Costs, conducting negotiations and detailed assessment proceedings, and in narrowing the legal areas in dispute, preparing Points of Dispute or Points of Reply.

For further information or to discuss your query, call one of the team or 01204 397302, or email one our experts at info@arccosts.co.uk. Alternatively, you can contact us via submission of our contact form, and one of the team will give you a call back to provide free initial advice.

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