During the course of a claim, there are a number of options you can take to prevent the matter from proceeding to court. One of these options is a Part 36 Offer made in accordance with the Civil Procedure Rules (CPR). A Part 36 Offer is designed to encourage parties to settle disputes without going to court and sets out the fines and penalties that a party could face if they exceed the time period or refuse a reasonable offer to settle.
An offer made under Part 36 is made on a without prejudice basis and can be made by both the claimant and the defendant in the claim. Once the offer is made, it is live for a period of 21 therefore, it is vital to consider them swiftly. A Part 36 Offer which offers to pay or offers to accept a sum of money will be treated as inclusive of all interest until the offer expires or, a date 21 days after the date in which the offer was made.
In order for a Part 36 Offer to be valid, it must:
- State that it is made pursuant to Part 36 of the CPR;
- Be in writing;
- Specify a period of no less than 21 days in which the defendant will be liable for the claimant’s costs should the offer be accepted (known as the ‘Relevant Period’); and
- Make mention of whether the offer takes into account any counterclaim.
If the offer is accepted, the claim is considered to be resolved. Alternatively, if the offer is not accepted within the Relevant Period, the claim will proceed with going to trial and if the parties do not agree the liability for costs, the court will make an order as to costs.
Note that in some cases, there can be considerably high penalties for refusing a Part 36 offer that results in being more or equal to the damages awarded in the case. Therefore, one of the key elements to consider when seeking to accept a Part 36 offer is the payment of costs as you could still be admitting liability in having to pay the claimant’s costs.
If you have received a Part 36 Offer and you are unsure on the best approach in dealing with it moving forward, contact the experts at Lawdit today.