Settlement (Syllabus 18)

Question 1

What is the Scope of CPR 36?

Answer 1

the section does not apply to an offer to settle to which Section II of this Part applies.
A party can make an offer to settle in any way he chooses, but if the offer is not made in accordance with CPR 36 it will not have the consequences specified.

Question 2

What is the relevant period?

Answer 2

(1) in the case of an offer made not less than 21 days before a trial
(2) otherwise, the period up to the end of such trial.

Question 3

Where does Part 36 apply to appeals?

Answer 3

except where a Part 36 offer is made in appeal

Question 4

What form must a Part 36 offer be in?

Answer 4

(1) be in writing
(2) make clear that it is made pursuant to Part 36
(3) specify a period of not less than 21 days within which the defendant will be liable for the claimant’s cost, if the offer is accepted
(4) state whether it relates tot he whole of the claim or to part of it or to an issue that arises in it and if so to which part or issue; and
(5) state whether it takes into account any counterclaim.

Question 5

If a Part 36 offer offers to pay or to accept a sum of money how will it be treated in terms of interest?

Answer 5

it will be treated as being inclusive of all interest until-

(1) the date on which the period expires;
(2) or if the 21 day period applies, a date 21 days after the date the offer was made

Question 6

If a defendant makes a Part 36 offer what should this be?

Answer 6

an offer to pay a single sum of money in settlement of a claim

Question 7

When must a Part 36 offer be made?

Answer 7

at any time including before the commencement of proceedings

Question 8

When is a Part 36 offer made?

Answer 8

when the offer is served on the offeree.

Question 9

Can the offeree request a Part 36 offer be clarified, and when must this be done?

Answer 9

Yes, they can within 7 days of the Part 36 offer being made.

Question 10

If the offeror does not give the clarification of the Part 36 offer as requested what can the offeree do?

Answer 10

Within 7 days of receiving the request the offeree may apply for an order for the offeror to do so, unless the trial has begun.

Question 11

When can the terms of a Part 36 offer be changed/ the offer be withdrawn?

Answer 11

only if the offered has not previously served notice of acceptance.

Question 12

How can an offeror withdraw the offer or change its terms?

Answer 12

by serving written notice of the withdrawal or change of terms on the offeree

Question 13

After the expiry of a relevant period what can the offeror do?

Answer 13

they may withdraw the offer or change its terms without the permission of the court; or the offer may automatically be withdrawn in accordance with its terms.

Question 14

When does notice of withdrawal/change of terms deemed to take effect?

Answer 14

when the notice of withdrawal or change of terms is served on the offeree

Question 15

if an offeror changes the terms of the Part 36 offer to make it more advantageous, how will this be treated?

Answer 15

As a new offer under the improved terms and the new relevant period will be the period specified of 21 days or longer if necessary.

Question 16

Can an offeror change/withdraw the terms of the Part 36 offer before the expiry of the relevant period?

Answer 16

(1) if the offeree has not served notice of acceptance of the origins offer by the expiry of the relevant period, the offeror’s notice has effect on the expiry of that period; and
(2) if the offeree serves notice of acceptance of he original offer, that acceptance has effect unless the offeror applies to the court for permission to withdraw the offer or to change its terms

Question 17

How can the offeror apply to the court to withdraw an offer/change its terms if there has been acceptance of the offer before the expiry of the relevant period?

Answer 17

the offeror must apply-

(1) within 7 days of the offeree’s notice of acceptance; or
(2) if earlier, before the first day of trial.

Question 18

When may the court give permission for a Part 36 offer to be varied or withdrawn?

Answer 18

where it is satisfied that there has been a change of circumstances since the making of the original offer and that it is in the interest of justice to give permission.

Question 19

How is a Part 36 offer accepted?

Answer 19

by serving written notice of acceptance on the offeror

Question 20

When is the court’s permission required to accept a Part 36 offer?

Answer 20

(1) where one but not all defendants accept the offer;
(2) the relevant period has expired and further deductible amounts have been paid to the claimant since the date of the offer
(3) an apportionment tis required; or
(4) the trial is in progress.

Question 21

If the court gives permission for a Part 36 offer to be accepted what happens with costs?

Answer 21

the court must make an order as to costs, and may order that the costs consequences in rule 36.13 apply.

Question 22

If an offeree accepts a Part 36 offer, what are the costs consequences?

Answer 22

if the offer is accepted within the relevant period, the claimant will be entitled to the costs of the proceedings up to the date on which notice of acceptance was served on the offeror.

Question 23

Where a Part 36 offer which was made less than 21 days before trial is accepted; or an offer which relates to the whole of the claim after the expiry of the relevant period is accepted or the offer does not relate to the whole claim, what is the outcome with costs?

Answer 23

the court must determine the liability for costs unless the parties have agreed costs.

Question 24

What happens where the parties. cannot agree upon the liability for costs?

Answer 24

The court must unless it considers it unjust to do so order that-

(1) the claimant be awarded costs up to the date on which the relevant period expired; and
(2) the offeree do pay the offeror’s costs for the period from the date of expiry of the relevant period to the date of acceptance.

Question 25

What are the other effects of acceptance of a Part 36 offer?

Answer 25

if a Part 36 offer is accepted, the claim will be stayed.

Question 26

Can a stay of proceedings due to a Part 36 offer affect the power of the court in enforcing the Part 36 offer?

Answer 26

No

Question 27

When must the money offered under Part 36 be paid?

Answer 27

within 14 days of the date of acceptance

Question 28

What happens if a party does not pay the sum within 14 days of acceptance?

Answer 28

the party can enforce the terms of the offer without the need for a new claim.

Question 29

What happens if a claimant wishes to accept a Part 36 offer made by one but not all of the defendants?

Answer 29

if the defendants are sued jointly or in the alternative, the claimant may accept the offer if-

(1) the claimant discontinues the claim against those defendants who have not made the offer; and
(2) those defendants give written consent to the acceptance of the offer.

if the defendants have severe liability the claimant may-

(1) accept the offer; and
(2) continue with the claims against the other defendants if entitled to do so.

Question 30

Are there restrictions on the disclosure of a Part 36 offer?

Answer 30

a Part 36 offer will be treated as without prejudice except as to costs.

Question 31

Can the fact that a Part 36 offer has been made and the terms of such an offer be communicated to the trial judge?

Answer 31

No, not unless the proceedings have been stayed, the offeror and offeree agree in writing that it should not apply or where any part of the case has been decided.

Question 32

What is a Calderbank offer?

Answer 32

A Calderbank offer is made by letter written “without prejudice save as to costs” but subject to an express reservation of the right to refer to the letter on the issue of costs should the clam proceed to judgment.

Question 33

If an offer is not made in accordance with the technical requirements set out in CPR r.36.5 what consequences will it have?

Answer 33

not the usual costs consequences.

Question 34

What should the court do if a party makes an offer intended to be a Part 36 offer but a point arises as to its construction?

Answer 34

the court should prefer the construction that would give effect to the stated intention and allow the offer to be effective

Question 35

What are the three main principles for non-complaint Part 36 offers?

Answer 35

(1) there is no possibility of an offer where mandatory requirements are not complied with being treated as a Part 36 offer
(2) the non-compliant offer must be taken into account under Part 44
(3) in exercising its discretion under Part 44 the court cannot treat an offer that is a near miss as a Part 36 offer.

Question 36

What are the formal requirements for a Part 36 offer?

Answer 36

(1) the offer must make clear that it is made pursuant to Part 36
(2) the requirement to state a period of not less than 21 days during which the defendant will be liable for the claimant’s costs is fundamental. (this is the relevant period)
(3) a valid Part 36 offer can be made after the issue of proceedings in respect of an unpleaded counterclaim.

Question 37

What is the difference in costs consequences where a Part 36 offer is accepted within the relevant period, as opposed to when the relevant period has expired?

Answer 37

the general rule is that when an offer is accepted within the relevant period, C is entitled to the costs of the proceedings up to the date when notice of acceptance was served on the offeror. If the offer is accepted after the expiry of the relevant period, the oferre should pay the offeror’s costs for the period form the date of expiry to the date of acceptance.

Question 38

What are the costs consequences following judgment for a claimant fails to obtain judgment more advantageous than the defendant’s Part 36 offer?

Answer 38

the court must unless it considers it just to do so order that the defendant is entitled to costs from the date on which the relevant period expired and interest on those costs.

Question 39

What are the costs consequences following judgment against a defendant is as least as advantageous to the claimant as the defendant’s Part 36 offer?

Answer 39

the court must unless it considers it unjust to do so, order that the claimant is entitled to-

(1) interest on the whole or part of any sum of money awarded, at a rate not exceeding 10% above base rate for some or all of the period starting with the date on which the relevant period expired.
(2) costs on the indemnity basis from the date on which the relevant period expired
(3) interest on those costs at a rate not exceeding 10% above base rate; and
(4) provided that the case has been decided and there has nit been a previous order, an additional amount which shall not exceed £75,00, calculated by applying the prescribed percentage set out below to the sum awarded to the claimant.

Question 40

What is the percentage to work out for claimant?

Answer 40

(1) amount awarded above £500,000 = 10% of the amount awarded
(2) above £500,000 = 10% of the first £500,000 and 5% of any amount above that figure.

Question 41

What circumstances must the court take into account when considering whether it would be unjust to make an order under CPR 36.17?

Answer 41

(1) the terms of the Part 36 offer
(2) the stage in the proceeding shine any Part 36 offer was made
(3) the information available to the parties at the time when the Part 36 offer was made
(4) the conduct of the parties with regard to the going of or refusal to give information for the purposes of enabling the offer to be evaluated
(5) whether the offer was a genuine attempt to settle the proceedings.

Question 42

Do the costs orders for Part 36 include any recoverable pre-action costs?

Answer 42

Yes

Question 43

Would the making of a Part 36 offer alone be considered a reasonable attempt to use ADR?

Answer 43

pit may not be as it does not provide for the exploration of issues or options. However, the fact that a Part 36 offer has been made might be part of a later argument in relation to a potential costs sanction

Question 44

Can legal representative reach a binding agreement?

Answer 44

only if they have authority to settle, as if they do not and they reach an agreement, the client will be bound by that agreement, even if it was not within the lawyers instructions.

Question 45

When are the parties bound by settlement?

Answer 45

once agreed, the settlement binds the parties immediately. Unless, it has been agreed that the terms will only become binding in certain circumstances.

Question 46

How can a negotiated agreement be enforced?

Answer 46

it will depend partly on when the terms become finally agreed and binding.

Question 47

Who is a settlement meeting usually attended by?

Answer 47

parties, their legal representatives, and a representative of the insurer.