Part 36 Notes

PART 36 OFFERS

• definition

  • an offer made in accordance with part 36

• privilege

  • part 36 offer itself is WP save as to costs

• interest

  • part 36 offers are inclusive of interest

• applicability of rules of contract law

  • part 36 = self-contained code, rules of contract NOT relevant unless clearly intended to be (Gibbons v Manchester CC)

  • effect: part 36 partially governed by contract law:

    • if accepted within relevant period = contract settling in terms of offer

    • BUT rejecting offer / making counter offer does NOT prevent offeree later accepting original offer (unless expressly revoked)

• scope

  • parties NOT obliged to use part 36 format for settlement offer

  • BUT if offer not made in accordance with r36.2, will NOT have consequences of a part 36 offer (r36.1(2))

• advising whether to accept / reject part 36 offer

  • must ensure client fully informed of costs consequences

DEFENCE OF TENDER BEFORE CLAIM

• when files defence D wishing to rely must make payment into court of amount said to have been tendered (r37.2, Greening v Williams)

• money may NOT be paid out without court's permission except where it is accepted without needing permission AND D agrees sum in court can be used to satisfy the offer (r37.3)

• rule that part 36 offers are WP save as to costs does NOT apply (r36.13(3))

THE PART 36 OFFER

• when?

  • may make at any time including before commencement AND in appeal proceedings (r36.3(2))

• form and content

  • offer must:

    1. be in writing (r36.2(2)(a))

       1. may make in letter

       2. form N242A preferable (PD 36A para 1.1)

    2. state on its face intended to have consequences of part 36 (r36.2(2)(b))

    3. specify the relevant period (only if offer made at least 21 days before trial) (r36.2(2)(c), 36.2(3)) - see below

    4. state whether relates to:

       1. whole claim; or

       2. part of claim + which part; or

       3. issue in claim + which issue (r36.2(2)(d))

N.B. offer may relate solely to liability (r36.2(5))

5. state whether takes into account any counterclaim (r36.2(2)(e))

• terms of the proposed compromise:

  1. sufficiently precise and certain

  2. clear on whether offer = 'full and final settlement' of all / some issues'

  3. clear on whether takes into account e.g. cross claim, previous interim payment

  4. costs consequences of acceptance

• the relevant period

  • if offer made at least 21 days (21 days or more) before trial

    • = period of not less than 21 days within which D will be liable for C's costs in accordance with r36.10 if offer accepted (r36.2(3), r36.2(2)(c))

  • if offer made less than 21 days before trial (need NOT specify in offer)

    • = period up to end of trial OR such other period as court may determine (r36.3(1)(c)(ii)) i.e. extended

  • extending the relevant period

    1. ask offeror to consent to extension (r36.3(c)(ii))

    2. failing consent apply to extend time under r3.1(2)(a) (Martin v Randall)

• additional formalities in certain claims

  • PI

    • offer must:

      1. where part 36 offer = compensation payments to Cs - comply with requirements in r36.15 re: recovery of state benefits under Social Security (Recovery of State Benefits) Act

         • before making offer, apply for certificate of recoverable benefits

         • state:

           1. whether offer made without regard to liability for recoverable amounts OR whether includes them

           2. gross compensation (i.e. before deduction)

           3. name + amount of deductible amount

           4. net compensation (i.e. after deduction)

      2. if claim for future pecuniary loss

         • can be lump sum, periodical payments or combo

         • must state which part is lump sum and which part is periodical payments (and how continuity of payment to be ensured)

      3. if claim for provisional damages

         • specify whether includes provisional damages

         • state sum offered on assumption C will NOT develop disease specified

         • that C must claim for further damages within specified limited period

  • offers made by Ds in money claims

    • must be offer to pay single sum (r36.4(1))

    • offer to pay all / part of sum at date later than 14 days after any acceptance part 36 offer unless accepted (r36.4(2))

    • single sum treated as inclusive of all interest to end of relevant period (r36.3(3))

• defects in formalities

  • minor defects correct under r3.10 (Hertsmere PCT)

  • significant departure part 36 offer

  • following part 36 offers:

    1. failure to state offer intended to have part 36 consequences + failure to state relevant period (Gibbon)

    2. time-limited offer (C v D)

  • determining defectiveness

    • interpret offer as would be read by reasonable solicitor (Onay v Brown)

    • if possible, read in a way that makes offer compatible with part 36 e.g. 'open for 21 days' read as 'won't be withdrawn in first 21 days' (NOT withdrawn after 21 days) (C v D)

• clarification of terms

  • if terms unclear, offeree may ask offeror to clarify (r36.8(1))

  • procedure

    1. make request within 7 days of service of offer (r36.8(1))

    2. offereor should respond within 7 days of receiving request (r36.8(2))

    3. if offeror doesn't respond offeree may apply for order that he complies (unless the trial has started) (r36.8(2))

  1. order must specify date when part 36 offer treated as having been made (r36.8(3))

• who to serve offer on + how

  • offeree

  • if legally represented, must serve on legal rep (PD 36A para 1.2)

  • use prescribed method of service in r6.20

• time when offer made

  • made when offer served on offeree (r36.7(1))

ACCEPTANCE OF A PART 36 OFFER

• how?

  • general rule

    • DON'T need court's permission, simply written notice

    • written notice of acceptance

1. serve on offeror (r36.9(1))

2. file notice of acceptance with court (PD 36A para 3.1)

   • if PI claim

     • periodical payments - C must apply to court for order for award of damages in form of periodical payments within 7 days of acceptance

     • provisional damages - C must apply to court for order for award of provisionao damages 7 days of acceptance

   • cases where court's permission required: (r36.9(3))

1. offer made by some - but NOT all - of multiple Ds and 36.12(4) applies (r36.9(3)(a)) - see below

2. claim is for PI damages, offer includes any deductible amounts AND since...

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