Part 36 of the Civil Procedure rules governs “Part 36 Offers”. Making a Part 36 offer can be very strategic move, it provides a means of putting real pressure on your opponent to settle a case.
Making or accepting a Part 36 Offer should be considered throughout the litigation process by you and your solicitor.
Part 36 Offers must be in a specific format, for example the offer must:
- Be made in writing;
- Make it clear that the offer is made pursuant to Part 36;
- Specify a period of time, not less than 21 days, within which your opponent will be liable for your costs if the offer is accepted (“the relevant period”);
- State whether it relates to the whole of the claim or part of the claim;
- State whether the offer takes into account any counter-claim.
Once a Part 36 Offer is made, it will be treated as “without prejudice save as to costs”. The consequence being that the existence of the offer cannot be shown to the Court before the case has been decided. Once the case has been decided, the Offer can be shown to the Court to assist with determining what portion of the successful party’s costs the unsuccessful party should be ordered to pay.
Accepting or rejecting the Part 36 Offer
If your opponent does not accept your Part 36 Offer, they will be at risk when it comes to costs and interest if they are not awarded a greater sum at the outcome of the trial. Unless it considers it unjust to do so, the Court must order your opponent to pay your costs, from the date when the relevant period of the offer expired and interest on those costs.
If your opponent does not accept your offer but obtains a judgement at the end of the trial awarding them a higher sum than the sum that was made in the Part 36 Offer, the Court must order you to pay their costs, on an indemnity basis from the date the relevant period expired plus interest.
If your opponent does accept your Part 36 Offer, you will be entitled to the costs you have incurred in the proceedings (to be assessed on a standard basis), up to the date the offer is accepted.