DR: Settlement

Question 1

What is the purpose of Part 36 of the CPR?

Answer 1

To encourage settlement by giving financial incentives and penalties for accepting or refusing offers

Question 2

When can a Part 36 offer be made?

Answer 2

At any stage of proceedings, including before issue, by either claimant or defendant

Question 3

What are the mandatory requirements for a valid Part 36 offer?

Answer 3

It must be in writing, state it is made under Part 36, specify a ‘relevant period’ of at least 21 days, state whether it covers whole or part of the claim, and state if it accounts for any counterclaim

Question 4

What additional requirements apply to a defendant’s Part 36 offer?

Answer 4

It must offer a single sum of money and, if payment is deferred beyond 14 days after acceptance, the offeree must expressly accept those terms

Question 5

When is a Part 36 offer treated as ‘made’?

Answer 5

When it is served on the offeree in accordance with CPR 6

Question 6

What is the ‘relevant period’?

Answer 6

The period of at least 21 days specified in the offer within which acceptance entitles the offeree to costs protection

Question 7

How can an offeree seek clarification of a Part 36 offer?

Answer 7

By requesting details (e.g., breakdown of components) within 7 days of service under CPR 36.8

Question 8

Under what conditions can a Part 36 offer be withdrawn or varied before the relevant period expires?

Answer 8

It can be withdrawn or varied without court permission, but withdrawal takes effect only at the end of the relevant period unless the offeree has already accepted

Question 9

When can a Part 36 offer not be withdrawn or varied?

Answer 9

Once accepted or once trial has started

Question 10

What must an offeror do to withdraw after the relevant period expires?

Answer 10

Serve notice of withdrawal; no court permission required unless acceptance already notified

Question 11

How does an offeree accept a Part 36 offer?

Answer 11

Serve written notice of acceptance on the offeror (and file it at court if proceedings begun) under CPR 36.11

Question 12

What happens to the claim when a Part 36 offer is accepted?

Answer 12

The claim is stayed and will not proceed to trial

Question 13

If a Part 36 offer includes a single sum payment, when must a defendant pay after acceptance?

Answer 13

Within 14 days of acceptance, unless otherwise agreed in writing

Question 14

What cost consequences apply if a Part 36 offer is accepted within the relevant period?

Answer 14

The claimant (whoever makes the offer) is entitled to its costs up to the date notice of acceptance was served

Question 15

What cost consequences apply if a Part 36 offer is accepted after the relevant period?

Answer 15

Unless unjust, the claimant recovers costs up to the end of the relevant period, and the offeree pays the offeror’s costs from the end of the relevant period to acceptance

Question 16

What special rules apply if a Part 36 offer is made less than 21 days before trial?

Answer 16

If made <21 days before trial, it has no Part 36 consequences unless the court abridges the relevant period

Question 17

How does a Part 36 offer that relates to part of a claim differ on acceptance?

Answer 17

If claimant abandons the remainder on acceptance, they recover only costs for the accepted part; if claimant continues remainder, court determines costs but must apply standard/indemnity rules as appropriate

Question 18

When does a withdrawal of a Part 36 offer take effect if notice given during the relevant period?

Answer 18

At the end of the relevant period unless the offeree has already accepted

Question 19

What are the two categories of consent orders following settlement?

Answer 19

Standard consent orders (public) and Tomlin Orders (public part containing stay plus confidential schedule of terms)

Question 20

What is a Tomlin Order?

Answer 20

A two-part consent order: Part 1 is a public stay and any court-enforceable provisions; Part 2 (the schedule) is confidential and contains detailed settlement terms

Question 21

What must be included in Part 1 of a Tomlin Order?

Answer 21

Any directions for payment or costs payable out of court, since those require court enforcement

Question 22

What is the effect of a settlement recorded by a consent order?

Answer 22

The consent order becomes a court order enforceable like any judgment, reflecting the parties’ agreement

Question 23

Under Part 36, when does a defendant’s unaccepted offer trigger consequences at trial?

Answer 23

If the claimant fails to obtain a judgment more advantageous than the defendant’s Part 36 offer

Question 24

What penalties apply to a claimant who fails to beat a defendant’s unaccepted Part 36 offer?

Answer 24

Unless unjust, the claimant pays the defendant’s costs from the end of the relevant period and interest on those costs

Question 25

When does a claimant’s unaccepted Part 36 offer trigger consequences at trial?

Answer 25

If the claimant obtains judgment at least as advantageous as their own unaccepted Part 36 offer

Question 26

What penalties apply to a defendant who fails to beat a claimant’s unaccepted Part 36 offer?

Answer 26

Unless unjust, the defendant pays indemnity costs from the end of the relevant period, interest on damages up to 10% above base rate, interest on those costs up to 10% above base rate, and a lump sum of 10% of the award (up to £500,000) or 5% above £500,000, capped at £75,000

Question 27

What factors can make Part 36 consequences ‘unjust’ under CPR 36.17(5)?

Answer 27

Timing and terms of the offer, information available when offer made/refused, parties’ conduct in giving/refusing information, and whether the offer was a genuine attempt to settle

Question 28

How are competing Part 36 offers from both claimant and defendant treated at trial?

Answer 28

Each is evaluated independently against trial outcome: if claimant beats its own offer, its penalties apply; if claimant fails to beat defendant’s offer, defendant’s penalties apply; if neither trigger, normal cost rules apply