PART 36 OFFERS: A POWERFUL TOOL FOR DISPUTE RESOLUTION
Like all good chess players plotting their next move, parties should always have, as part of their litigation strategy, the powerful Part 36 offer in mind. Unlike other forms of settlement negotiations, Part 36 is a self-contained set of rules which carries significant legal implications whether an offer is accepted or not and can have significant consequences for both parties involved.
Part 36 provides an incentive for parties to make a genuine attempt to reach a settlement. The incentive is that even if no settlement is reached but the offeror wins at trial (beating the offer made by way of Part 36), then they can unlock increased costs and, in most circumstances, further interest and additional sums of money.
Strict requirements
A Part 36 offer, governed by Part 36 of the Civil Procedure Rules (CPR), is a formal, genuine offer to settle made by one party to another with the intention of settling a dispute. For it to be effective, a Part 36 offer must be made in accordance with the strict requirements set out in CPR 36. Complying with CPR 36 is therefore vital to ensure that a Part 36 offer holds the weight of the consequences attributed to it.
Pursuant to CPR 36.5, a Part 36 offer must: (i) be made in writing; (ii) make clear that the offer is made pursuant to CPR 36; (iii) specify the relevant period of not less than 21 days within which a defendant will be responsible for the claimant’s costs if the offer is accepted (the ‘relevant period’); (iv) specify the scope and extent of the offer; and (v) in appropriate cases, state whether it takes account of any counterclaim.
Oct-Dec 2023 issue
Greenberg Traurig LLP