Gary Knight

Part 36 offers

It’s another commentary on Part 36 offers, this time by Harmans Partner and Costs Lawyer Gary Knight.

Why now?

Some recent cases caught my eye and once I started to pull the thread I could not stop – you may wish to skip towards the end.

The issuethat there must be some genuine element of concession in the Part 36 offer.

By now we are all so familiar with Part 36 of the Civil Procedure Rules (36.1) and that it is a self-contained set of rules designed to encourage both the Claimant and Defendant to settle the claim outside of court.

We have no doubt grown weary of being reminded that any offer made under Part 36 is on a ‘without prejudice, save as to costs’ basis (36.16). The court will only be informed of a Part 36 offer when the issue of costs falls to be considered. A Part 36 offer may be an offer of a sum of money, but it can be a non-monetary offer, for example an offer on liability.

Our back teeth may be nauseous to be further advised that either party can make an offer to settle the claim. If the offer is accepted, the claim is resolved, subject to any issues in respect of costs.

Please, you cry, not another reminder that if the offer is rejected, the parties go to trial and there may be cost consequences to this.

  • the offer must be in writing (36.5(1)(a))
  • it must make clear that it is made pursuant to Part 36 (36.5(1)(b))
  • it must specify a period of not less than 21 days within which the defendant will be liable for the claimant’s costs (the “Relevant Period”) (36.5(1)(c))
  • it must state whether it applies to the whole or part of the claim (36.5(1)(d))
  • it must state whether it takes into account any counterclaim (36.5(1)(e))

Yes, I know that you know that where a claimant obtains a judgment which is at least as advantageous as the Claimant’s Part 36 offer the court will award – unless it considered it unjust to do so – my emphasis added.

  • Interest on damages at 10% above base rate;
  • Costs on the indemnity basis;
  • Interest on costs at 10% above base rate:
  • An “additional amount” of 10% of the first £500,000 and 5% of any amount above that figure (subject to the limit of £75,000)

But please allow me a brief traipse through some costs cases of past times that arose from challenges to the parties’ recovering the four benefits referred to above:

Click here for Part 36 review in full by Costs Lawyer and Partner Gary Knight.