Legal costs, such as solicitors fees, are a big deal in many cases, big or small. For this reason, it's often better to settle disputes before they go to court and Part 36 offers are meant to encourage this.
Part 36 offers are often used as a strategic way to settle disputes and secure better cost recovery if you win at trial.
In this article, we'll explain Part 36 offers, when to use them, and their advantages and disadvantages for claimants and defendants.
Table of Contents
- What is Part 36?
- What is a Part 36 offer?
- What types of cases does Part 36 cover?
- How to make a compliant Part 36 offer
- What are the advantages of a Part 36 offer for claimants?
- What are the advantages of a Part 36 offer for defendants?
- When can a Part 36 offer be made?
- Should I make a Part 36 offer?
- Can I ask for clarification on a Part 36 offer?
- Can a Part 36 offer be withdrawn or changed?
- How is a Part 36 offer accepted?
- How are costs assessed if not agreed on?
- How can Lawhive help?
What is Part 36?
Part 36 is a section of the legal procedure that deals with offers to settle disputes. It provides rules and guidelines for making and accepting settlement offers in legal cases.
What is a Part 36 offer?
A Part 36 offer is a type of offer made following the rules outlined in Part 36 of the Civil Procedure Rules.
If the other party doesn't do better than the offer at trial, there are automatic cost consequences, typically benefiting the offering party.
What types of cases does Part 36 cover?
Part 36 covers various types of cases, including personal injury claims, appeals, and other disputes.
How to make a compliant Part 36 offer
For a Part 36 Offer to be valid it must:
Settle all or part of the case
Be in writing and clearly labeled as a Part 36 offer.
Give the other party at least 21 days to accept.
Specify what's included in the offer and if it covers any counterclaims.
In April 2015, to prevent misuse of Part 36 offers, a new rule was added that says the court must consider if the offer was a real attempt to settle the case. If not, the court might decide not to enforce the usual Part 36 cost rules.
Part 36 rules aim to make sure that settlement offers genuinely aim to end the disagreement, instead of being used to force the other side into paying more if they lose in court.
If the other side accepts a Part 36 offer, they pay your legal costs up to that point.
A helpful court form called N242A can guide you in making a compliant offer. However, it doesn't cover every scenario, like what happens if the other party accepts your offer late.
To be safe, consider including a provision for trailing interest. If this sounds complicated, you're not alone.
It's wise to seek advice from a litigation solicitor who can help you understand the process and present your offer effectively.
Contact us today for a free quote and get an expert litigation solicitor on your side in as little as 24 hours.
What are the advantages of a Part 36 offer for claimants?
If you're bringing a claim and make a Part 36 offer and the court ultimately awards you the same amount or more than the offer, not only does the defendant have to pay you that amount, but they're also liable to pay:
Interest on the judgment at a rate of up to 10% above the base rate, starting from the end of the relevant period.
Legal costs up to the end of that period are paid on a standard basis and on the indemnity basis after that.
Interest on legal costs at a rate of up to 10% above the base rate.
An additional amount of either 10% of the damages awarded up to £500,000) or 5% of anything beyond that, up to a max of £75,000.
What are the advantages of a Part 36 offer for defendants?
If a defendant facing the prospect of beating the claim and getting their costs covered makes a solid Part 36 offer, if the claimant doesn't beat the offer, the defendant could end up getting their costs on the indemnity basis after the relevant period expires.
When can a Part 36 offer be made?
A Part 36 offer can be made at any point during the legal process by either side.
But if you make the offer less than 21 days before the trial or final hearing, it won't trigger the automatic cost benefits that come with Part 36 offers. Instead, it's up to the court to decide.
Further, unlike other settlement offers, a Part 36 offer doesn't disappear if the other side ignores it or makes a counteroffer. It stays on the table until the party who made the offer decides to withdraw it.
Should I make a Part 36 offer?
Deciding whether to go for a Part 36 offer depends on what's going on in your case. And remember, it's important to keep your offer fair and genuine, otherwise, the courts might not like it.
Can I ask for clarification on a Part 36 offer?
You can ask for clarification on a Part 36 offer within 7 days of receiving it.
If the offeror doesn't provide clarification within 8 days, unless the trial has started, you can ask the court to order the offeror to clarify.
Can a Part 36 offer be withdrawn or changed?
A Part 36 offer can be withdrawn or changed if it hasn't already been accepted. To do this, the offeror has to serve written notice of the withdrawal or change to the other party.
Alternatively, the offeror can withdraw the offer or change its terms without needing court permission after the relevant period ends.
If the offer is accepted before the relevant period ends, the acceptance stands unless the offeror applies to the court for permission to withdraw or change the offer.
How is a Part 36 offer accepted?
A Part 36 offer is accepted by serving written notice of acceptance on the party who made the offer.
But, there are certain circumstances where court permission may be required to accept an offer.
How are costs assessed if not agreed on?
Unless the recoverable costs are fixed by the rules, costs are assessed on the standard basis if the amount of costs is not agreed upon by the parties.
How can Lawhive help?
If you're unsure about making or dealing with a Part 36 offer, our network of skilled litigation solicitors can give you the guidance you need.
Get in touch with our Legal Assessment Team for a free quote and expert advice tailored to your situation.