Settlement Flashcards
(24 cards)
What is the purpose of Part 36 CPR?
- To encourage settlement
- To provide clear financial incentives and penalties when offers to settle are accepted or rejected
- To compensate reasonable parties who made settlement efforts and penalise unreasonable parties who refused them
When can a Part 36 offer be made and by whom?
- At any time, including before proceedings are issued
- By either the claimant or defendant
What distinguishes a Part 36 offer from a Calderbank offer?
- Part 36 offers follow strict procedural rules and have specific costs consequences
- Calderbank offers are made “without prejudice save as to costs” and do not follow Part 36 rules but are considered under CPR 44 discretion
What are the formal requirements for a valid Part 36 offer?
- Must be in writing
- Must state it is made pursuant to Part 36
- Must specify a relevant period of not less than 21 days
- Must state whether it applies to all or part of the claim
- Must state whether it takes account of any counterclaim
What additional requirements apply to a defendant’s monetary Part 36 offer?
- Must be a single lump sum (except in limited cases)
- If payable later than 14 days after acceptance, it will only qualify as a Part 36 offer if the claimant accepts
When is a Part 36 offer deemed made?
When it is served on the offeree
Can a Part 36 offer be clarified?
Yes, the offeree may request clarification within 7 days of service
When can a Part 36 offer be withdrawn or changed?
- After the relevant period: freely
- During the relevant period: effective only after expiry, unless accepted earlier
- If accepted during the relevant period, withdrawal/change requires court permission, which must be sought within 7 days of acceptance or before trial starts
How is a Part 36 offer accepted?
- By serving written notice of acceptance on the offeror
- If proceedings are issued, the notice must also be filed at court
What happens when a Part 36 offer is accepted?
- The claim is stayed
- A sum of money must be paid within 14 days unless otherwise agreed
- Failure to pay allows the claimant to enter judgment
- Non-monetary terms can be enforced by applying to court
What are the costs consequences of acceptance within the relevant period?
The claimant is entitled to their costs up to the date of service of acceptance
What are the costs consequences of acceptance after the relevant period?
- Unless unjust, the claimant gets costs to end of relevant period
- The offeree pays the offeror’s costs from that point until acceptance
What happens if the Part 36 offer relates to part of a claim?
- If the claimant abandons the rest: only gets costs for the accepted part
- If not: court determines costs liability
What are the consequences when a claimant fails to beat a defendant’s Part 36 offer at trial?
- Pays defendant’s costs from expiry of relevant period
- Pays interest on those costs (unless unjust)
What are the consequences when a claimant beats their own Part 36 offer?
- Indemnity costs from expiry of relevant period
- Interest on damages up to 10% above base rate
- Interest on indemnity costs up to 10%
- Additional sum (10% up to £500k, then 5% thereafter, capped at £75k)
What is the test for determining if a Part 36 consequence should apply?
- Compare trial result to the offer in money terms
- Must be better for claimant (if evaluating defendant’s offer)
- Must be at least as good for claimant (if evaluating claimant’s offer)
When might the court decide it is unjust to impose the normal Part 36 consequences?
Factors considered:
- Terms of the offer
- Timing of the offer
- Information available at time
- Parties’ conduct
- Whether it was a genuine settlement attempt
When does Part 36 not apply even if an offer is not accepted?
- If offer withdrawn
- If made within 21 days of trial and court does not shorten the period
- If offer changed to be less advantageous and the offeree beats the changed terms
What happens if both sides made Part 36 offers that were not accepted?
- Court assesses both offers against the trial outcome
- Only the offer that was not bettered (or was at least matched) has effect
- Both offers might be ineffective if the trial result falls between them
What is a consent order?
- A court order recording settlement terms agreed by both parties
- May be contractual or non-contractual
- Enforceable like any other court order
What is a Tomlin Order and when is it used?
-A special type of consent order with two parts:
—-Part 1: Public court order (e.g. stay, permission to apply, costs)
—-Part 2: Confidential schedule with settlement terms
- Used when terms exceed court’s jurisdiction or require confidentiality
How is a consent/Tomlin Order approved by the court?
- Filed with the court and must be approved
- If during a stay, application also revives the case
What if a dispute is settled before proceedings are issued?
- Settlement agreement (contract) is used instead of a consent/Tomlin Order
- Care is needed to define the scope of the resolved dispute
Can consent orders be used for interim applications?
- Yes, to reflect agreed changes such as time extensions
- Must be filed at court and may be approved without a hearing
