Walton Mills Solicitors
INFORMATION SHEET 6

PART 36 CIVIL PROCEDURE RULES 1998

Claimant's Part 36 Offer

It is possible for either a Claimant or a Defendant to place their opponent at risk of incurring costs and other financial penalties by making a formal offer to settle a claim, called a "Part 36 offer". A Part 36 offer to settle can be made at any time: before or after proceedings have commenced.

A Part 36 offer will be calculated to take into account any anticipated reduction that may be made on account of contributory negligence, if any.

Under the Social Security (Recovery of Benefits) Act 1997, an insurer has a legal obligation to deduct from any compensation payment any State benefits received by a Claimant as a result of the injury. Any money deducted in this way is accounted to a Government department called the Compensation Recovery Unit. You will be informed of any sums deducted in this way.

A Part 36 offer into Court is a tactical step. It is used as a means to pressurise the opponent into settling a claim early, rather than proceeding to a hearing. It is necessary for you to decide whether or not the Part 36 offer is sufficient to compensate you for your injury and losses.

The normal costs rule is that the losing party pays the winning party's costs, assessed on the standard basis. Accordingly, provided you are likely to recover some damages (above the small claims track limit) and you have not been put at risk as to your costs by means of a Part 36 offer by your opponent, you may have little to gain by making a formal offer to settle.

However, if, after your claim has been fully investigated, we think that the Defendant is unreasonably delaying settlement of your claim and/or has failed to make an adequate offer or payment, you may wish to make your own Part 36 offer to settle. In doing so you will put the Defendant at risk of paying a higher level of costs and possibly a higher rate of interest on your claim and/or your costs. This could focus your opponent's mind on settling your claim promptly.

The rules relating to Claimant's Part 36 offers are similar to those that apply to a Defendant.

If the Defendant accepts your Part 36 offer

If the Defendant accepts your Part 36 offer to settle your claim within the 21 day period that will create a binding agreement and finalise the claim. Then you should be entitled to recover the majority of your costs (on a "standard basis") from the Defendant up to the date of acceptance.

If the Defendant does not accept your Part 36 offer

If the Defendant does not accept your Part 36 offer, then you can proceed with your claim to trial, if necessary. The trial judge will not know about your Part 36 offer, until after he or she has made the award.

If the trial judge awards you more

If the trial judge awards you more than the sum which you were prepared to accept in settlement, then you will be entitled as of right to:-

In addition, the trial judge will probably award you:

If the trial judge awards you less

If the trial judge awards you less [or no more than] the amount of your Part 36 offer, then you will only be entitled to:

If you have the benefit of legal aid

If you have the benefit of legal aid then you will still be at risk as to your costs following a Part 36 offer. If you fail to beat the offer then the Court can still order you to pay your opponent's legal costs and disbursements from your damages and if necessary from any contribution that you have made towards your Legal Aid. If you do not accept a Part 36 offer or payment then it is necessary to report this fact to the Legal Aid Board who will then review the merits of your claim and decide whether to continue to support your case.

If you have the benefit of Legal Aid and accept a Part 36 offer, then the money will be held by this firm, subject to the Legal Aid Board's statutory charge. The Board are entitled to recover their outlay from any monies recovered or preserved as a result of the proceedings. This money, or a significant proportion of it, may have to be retained by this firm until your legal costs and disbursements have been recovered from the opponents.

If you have the benefit of a legal expenses insurance policy

If you have the benefit of a legal expenses insurance policy or are funded by a union it is also necessary to report the fact that a Part 36 offer has been made, and again, they will then review the merits of continuing to financially support your claim.

If this firm is acting for you under a Conditional Fee Agreement

If this firm is acting for you under a Conditional Fee Agreement, and you reject a Part 36 offer on our advice and if the case proceeds to a hearing where you recover damages that are no more than the payment into Court, then the terms of the Law Society's recommended terms are that no success fee will be charged. This firm's costs will be limited to its basic costs, (your Conditional Fee Agreement may vary this) for work carried out after receipt of the Part 36 notice. If you decide to reject a Part 36 offer against our advice then we have the right to end the Conditional Fee Agreement. You will then be responsible to pay this firm's basic costs and disbursements. You will only be responsible to pay this firm's success fee if you go on to win your case, unless your damages or settlement are at least 20% more than the offer that we advised you to accept.

Generally

Generally. We will tell you if and when your opponent makes a Part 36 offer and we will give you our advice in order to help you decide whether to accept or to reject it. However, litigation is an uncertain business. It is rarely possible to predict to the exact amount of an award. Accordingly, the decision to accept or reject a Part 36 offer must be made by you since the consequences of misjudging the offer or payment is likely to have a direct impact on you personally.