Part 36 of the Civil Procedure Rules (CPR) sets out a formal way to conduct negotiations in order to settle a claim before it reaches court. Of course, a party can make an offer to settle in any way they see fit, but Part 36 offers are treated as ‘without prejudice save as to costs’. This means that any Part 36 offers cannot be communicated to the trial judge until after the outcome of the case has been decided, and only the issues of costs remains.
Part 36 offers can be made at any time, and are easily recognisable. This is because they must be in writing, and state on them that they intend to comply with Part 36 of the CPR. It will have a deadline by which it must be accepted, which must be at least 21 days, and this is known as the ‘relevant period’. More than one Part 36 offer can be made, but if a party wants to change their offer within the 21 day period, they will need the court’s permission.
If a party decides to accept the Part 36 offer within the relevant period, they need to put this in writing to the other party. This is then binding on both parties. Unless otherwise agreed, any monies need to be paid within 14 days of the date of the acceptance. When the defendant accepts the claimant’s Part 36 offer, the claimant can claim their costs of the proceedings up to the date that the offer was accepted, unless the offer states otherwise.
If the Part 36 offer is rejected, and the case goes to court – what then happens? As previously mentioned, the judge cannot know about the offer until after the judgement, however, it can have a bearing on the costs. If the claimant wins and is awarded more than the Part 36 offer, the claimant can claim interest on the damages, plus costs from the end of the relevant period, and interest on those costs.
As we have seen before, costs can end up being pretty hefty after a court case, particularly after interest has been added on. The legal system encourages Part 36 offers as they make ending up in court the absolute last case scenario.
The rules governing part 36 offers may be found here:
