Settlement and ADR

Question 1

What is the purpose of Part 36 of the CPR?

Answer 1

To encourage settlement between parties.

Question 2

What are the main components of a Part 36 offer?

Answer 2

A Part 36 offer describes a kind of offer, sets out consequences if accepted, and sets out different consequences if not accepted.

Question 3

What discretion does the court have regarding costs under Part 36?

Answer 3

The court has wide discretion when awarding costs and considers the behaviour of both parties.

Question 4

What is the ‘relevant period’ in the context of a Part 36 offer?

Answer 4

A period of not less than 21 days within which the defendant will be liable for the claimant’s costs if the offer is accepted.

Question 5

When can a Part 36 offer be made?

Answer 5

At any stage of proceedings, including before proceedings are issued.

Question 6

What is a Calderbank offer?

Answer 6

An offer communicated in writing, ‘without prejudice save as to costs’, and not needing to comply with Part 36.

Question 7

What must a valid Part 36 offer include according to CPR 36.5?

Answer 7

Must be in writing, state it is made under Part 36, specify a relevant period, state whether it relates to the whole or part of the claim, and state whether it considers any counterclaim.

Question 8

True or False: A Part 36 offer can be made verbally.

Answer 8

False.

Question 9

What happens if a Part 36 offer is accepted?

Answer 9

The claim will be stayed and the settlement sum must usually be paid within 14 days.

Question 10

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

Answer 10

By requesting clarification within 7 days of service.

Question 11

What happens if a Part 36 offer is accepted within the relevant period?

Answer 11

The claimant is entitled to costs of the proceedings up to the date of acceptance.

Question 12

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

Answer 12

The court will determine costs unless agreed by the parties; claimant is awarded costs up to relevant period and offeree pays offeror’s costs thereafter.

Question 13

What is the consequence of accepting a Part 36 offer that relates to only part of a claim?

Answer 13

If the claimant abandons the remainder, they are entitled to costs only for the part in the offer; if not abandoned, court determines costs.

Question 14

Fill in the blank: A Part 36 offer must specify a ______ period of not less than 21 days.

Answer 14

relevant

Question 15

What is the effect of withdrawing a Part 36 offer during the relevant period?

Answer 15

Any notice of withdrawal will take effect at the end of the relevant period unless the offeree accepts the offer.

Question 16

What must happen for a Part 36 offer to be valid?

Answer 16

It must comply with the rules set out in Part 36.

Question 17

What should a letter containing a Part 36 offer include?

Answer 17

It should state that it is made pursuant to Part 36.

Question 18

How can a party accept a Part 36 offer?

Answer 18

By serving written notice of acceptance on the offeror.

Question 19

What happens if a Part 36 offer is made less than 21 days before trial?

Answer 19

The court must determine liability for costs unless the parties agree.

Question 20

What is the main rationale behind Part 36?

Answer 20

To benefit parties who make reasonable settlement proposals that are not accepted.

Question 21

What is the general rule regarding costs in civil procedures (CPR 44)?

Answer 21

The court generally has discretion to award costs.

Question 22

What must happen for a Part 36 offer to be withdrawn?

Answer 22

A Part 36 offer can be withdrawn after the end of the relevant period

The relevant period refers to the time frame within which the offer must be accepted.

Question 23

What happens if a Part 36 offer is accepted?

Answer 23

The claim is stayed and the settlement sum must usually be paid within 14 days

Acceptance of a Part 36 offer leads to a halt in the proceedings until payment.

Question 24

What costs is a claimant entitled to if their Part 36 offer is accepted within the relevant period?

Answer 24

Costs up to the date notice of acceptance was served on the offeror

This ensures the claimant is compensated for reasonable legal expenses incurred.

Question 25

What determines the costs if a Part 36 offer is accepted after the relevant period?

Answer 25

The court will determine costs unless the parties agree otherwise ## Footnote The court typically awards the claimant its costs up to the expiry of the relevant period.

Question 26

What is the 'trigger' for consequences of an unaccepted Part 36 offer?

Answer 26

A claimant fails to obtain a judgment more advantageous than a defendant's Part 36 offer ## Footnote 'More advantageous' means better in monetary terms, however small.

Question 27

What are the consequences for a claimant who fails to accept a defendant's Part 36 offer?

Answer 27

The claimant must pay the defendant's costs and interest from the expiry of the relevant period ## Footnote The court can order these unless it considers it unjust.

Question 28

In the context of unaccepted offers, what does 'more advantageous' mean?

Answer 28

'More advantageous' means better in money terms, however small the amount ## Footnote This applies when comparing trial judgments to the defendant's offer.

Question 29

What happens if the 'trigger' is not met concerning a defendant's Part 36 offer?

Answer 29

The defendant's Part 36 offer has no effect ## Footnote This occurs if the claimant does better at trial than the defendant's offer.

Question 30

What does the court typically order if a claimant wins against a defendant's Part 36 offer?

Answer 30

The defendant will pay the claimant's costs for the period before the relevant period expired ## Footnote This follows the usual costs rules under CPR 44.

Question 31

What is the consequence for a defendant if they do not accept a claimant's Part 36 offer?

Answer 31

The court may impose enhanced interest and costs assessed on the indemnity basis ## Footnote This applies if the judgment is at least as advantageous to the claimant as their offer.

Question 32

What additional costs may a defendant incur if they do not accept a claimant's Part 36 offer?

Answer 32

An additional amount based on a percentage of the award up to £75,000 ## Footnote The percentage is 10% up to £500,000 and 5% above that.

Question 33

What happens if a claimant's offer is not accepted and the judgment is less than their offer?

Answer 33

There are no consequences under Part 36 ## Footnote The claimant may still receive costs under the normal rules.

Question 34

What is the court's approach when considering whether to impose penalties for unaccepted Part 36 offers?

Answer 34

The court will consider whether it is unjust to impose penalties ## Footnote Factors include the terms of the offer and the conduct of the parties.

Question 35

What happens to Part 36 consequences if an offer was made within 21 days of the trial?

Answer 35

There will be no Part 36 consequences unless the court abridges the relevant period ## Footnote This ensures the offeree had a fair opportunity to accept the offer.

Question 36

What is the consequence if a Part 36 offer is changed to be less advantageous?

Answer 36

The Part 36 consequences do not apply ## Footnote This applies if the offeree beats the less advantageous offer.

Question 37

What must a party do to get full costs protection under Part 36?

Answer 37

Make the offer more than 21 days before trial and leave the offer open ## Footnote Early offers increase the potential benefits to the offeror.

Question 38

What happens if both claimant and defendant have made Part 36 offers that are unaccepted?

Answer 38

Each offer is considered in turn based on the trial judgment ## Footnote The consequences depend on whether the judgment is advantageous relative to each offer.

Question 39

What is the outcome if a claimant's judgment is less than their own Part 36 offer?

Answer 39

The claimant's offer has no consequences under Part 36 ## Footnote Costs may still be awarded under normal rules.

Question 40

What are the consequences of a claimant failing to beat a defendant's offer?

Answer 40

The claimant is ordered to pay the defendant's costs from the date the relevant period expired, and interest on those costs. ## Footnote This consequence emphasizes the importance of evaluating offers accurately before proceeding to trial.

Question 41

What happens if a claimant matches or exceeds their own offer?

Answer 41

The defendant is ordered to pay enhanced interest, indemnity costs, and interests on those costs from the date the relevant period expired, plus a lump sum. ## Footnote This rule serves as an incentive for claimants to accurately assess their positions before trial.

Question 42

What is the significance of the phrase 'unless the court considers it unjust' in relation to offers?

Answer 42

It indicates that the court has discretion to modify the consequences of failing to accept or beat an offer based on the circumstances of the case. ## Footnote This clause allows for flexibility in the application of costs rules.

Question 43

What are the main forms of Alternative Dispute Resolution (ADR)?

Answer 43

* Negotiation * Mediation * Arbitration * Med-arb * Early neutral evaluation * Expert determination * Conciliation ## Footnote These forms vary in their process and outcomes, providing various options for dispute resolution.

Question 44

Define negotiation in the context of ADR.

Answer 44

A communication process between parties intended to reach a compromise or agreement to the satisfaction of both parties. ## Footnote Negotiation emphasizes direct communication and mutual agreement.

Question 45

What is mediation?

Answer 45

A confidential process intended to facilitate the resolution of disputes through an impartial third party, the mediator, who guides parties towards an agreement without authority to bind them. ## Footnote Mediation allows for a collaborative approach to dispute resolution.

Question 46

What defines arbitration?

Answer 46

A process where a dispute is resolved by an impartial adjudicator whose decision is final and binding on the parties. ## Footnote Arbitration removes the case from court jurisdiction, requiring parties to accept the adjudicator's decision.

Question 47

What is the difference between expert appraisal and expert determination?

Answer 47

* Expert appraisal: provides a non-binding opinion * Expert determination: results in a binding decision ## Footnote This distinction is crucial for parties deciding on the form of ADR to pursue.

Question 48

What are the advantages of using ADR?

Answer 48

* Court expectations * Better relationships * Less expensive * Saves time * Privacy/confidentiality * Less disruption * Range of outcomes * Outcomes reflect risk * Parties in control * Greater involvement ## Footnote These advantages can make ADR more appealing than traditional litigation.

Question 49

How does the court encourage parties to engage in ADR?

Answer 49

* Provide information about ADR * Stay proceedings for ADR * Order parties to engage in ADR ## Footnote The court's encouragement aims to facilitate quicker and fairer resolutions.

Question 50

What timing considerations should parties keep in mind when engaging in ADR?

Answer 50

* Cost saving * Better relationships and information * Understanding cases and evidence better later * Avoiding premature ADR costs ## Footnote Timing can significantly affect the effectiveness and efficiency of the ADR process.

Question 51

Which types of cases are generally not suitable for ADR?

Answer 51

Very few cases are unsuitable for ADR; most concerns can be addressed with appropriate ADR choices. ## Footnote This flexibility allows ADR to be applicable in a wide range of disputes.

Question 52

What role do lawyers play in the ADR process?

Answer 52

* Ensure clients are aware of ADR options * Help clients pursue desired ADR * Involve clients in settlement discussions ## Footnote Legal representatives are crucial in guiding clients through ADR effectively.

Question 53

What does ADR stand for?

Answer 53

Alternative Dispute Resolution ## Footnote ADR encompasses various methods to resolve disputes outside of court.

Question 54

What is the usual costs order at the end of an English court case?

Answer 54

The unsuccessful party pays the successful party's costs ## Footnote This is at the discretion of the court based on various factors.

Question 55

What factors does the court consider when making a costs order?

Answer 55

The conduct of the parties, including: * Conduct before and during proceedings * Compliance with pre-action protocols ## Footnote Refer to CPR 44.2 (4) and (5) for specifics.

Question 56

What can the court do to encourage parties to engage in ADR?

Answer 56

Reward positive ADR behavior and punish poor behavior in costs ## Footnote The court may impose costs penalties for unreasonable refusal to engage in ADR.

Question 57

What happens if a successful party refuses to engage in ADR?

Answer 57

The court may impose a costs penalty if the refusal was unreasonable ## Footnote The burden of proof is on the unsuccessful party to justify the refusal.

Question 58

What are the circumstances the court considers regarding ADR refusal?

Answer 58

* Nature of the dispute * Merits of the case * Extent of other settlement methods attempted * Costs of ADR * Delay in ADR setup * Prospects of ADR success

Question 59

True or False: The court will penalize a party for failing to suggest ADR.

Answer 59

False ## Footnote The court does not penalize simply for not suggesting ADR unless it breaches a court order.

Question 60

What should a party do upon receiving an offer to engage in ADR?

Answer 60

* Consider the merits of the offer * Respond promptly in writing * Explain reasons for refusal if applicable * Make the letter 'open' or 'without prejudice save as to costs' * Document reasons for refusal separately

Question 61

What powers does the court have at a Case Management Conference (CMC) to encourage ADR?

Answer 61

* Order a stay for ADR exploration * Direct parties to consider ADR * Require explanations for ADR decisions

Question 62

What is the benefit of engaging in ADR early?

Answer 62

Leads to greater costs savings in the event of success ## Footnote Engaging in ADR early can also improve the starting position of court proceedings.

Question 63

What is the definition of discontinuance in civil procedure?

Answer 63

Discontinuance is when a claimant chooses not to pursue a claim against a defendant any further ## Footnote Only the claimant can initiate discontinuance.

Question 64

What are the major consequences of discontinuance?

Answer 64

* Ends the proceedings for the claim/part discontinued * Claimant liable for defendant's costs up to discontinuance

Question 65

What is needed for a claimant to discontinue proceedings in exceptional circumstances?

Answer 65

The court's permission ## Footnote This is generally required if the claimant has received some remedy.

Question 66

What is the procedure for discontinuance?

Answer 66

* File a notice of discontinuance at court * Serve a copy on every party * Discontinuance takes effect from the date of service

Question 67

What is the deemed costs order upon discontinuance?

Answer 67

A costs order is deemed to have been made in the defendant's favor on the standard basis ## Footnote Refer to CPR 38.6 and 44.9(1)(c) for details.