CPR Part 36 Offers – reminder from practice
We all know how useful a tool Part 36 Offers are in the thorny world of litigation. They really help parties focus their minds and tune into the reality of the severe costs consequences.
But in order to have effect, they need to be properly drafted and fully compliant. This reminder deals with the very basic requirements that a Part 36 Offer must be in writing and make clear that it is made pursuant to Part 36. This is what CPR 36.5 says :
Form and content of a Part 36 offer
(1) A Part 36 offer must—
(a) be in writing;
(b) make clear that it is made pursuant to Part 36;
In a very recent Fast Track case, the parties engaged in without prejudice communications. The matter was listed for trial on 11 May 2022. Let’s see what happened.
- A part 36 Offer was made by the Claimant on 9 May 2022 at 17:58 PM.
- The Part 36 offer dated 9 May 2022 was rejected by the Defendant the following morning, 10 May 2022, at 09:08 AM.
- At 14:05 PM on 10 May 2022 the Claimant send an email to the Defendant simply saying “further to our conversation, I can go to £10,000 to settle. Please respond by email”
- This offer made at 14:05 was accepted by email, by the Defendant, at 14:57 , the same email also seeking agreement on costs.
- Some discussion went on between the two solicitors as to what is the appropriate way to notify the court that the Claim has settled, which concluded at 15:58 with an email from the Defendant saying “ Here is a Part 36 Offer for £10,000” and attaching the same.
- The Claimant accepted the Defendant’s Part 36 offer at 16:17 on 10 May 2022.
The Claimant contacted the Court by email at 17:58 on 10 May 2022, by email, sending a statement of costs but no consent order. This was far too late. The matter came to trial on 11 May 2022, because the parties ran out of time to notify the Court, as the acceptance was past 4 PM.
They argued whether the Claimant should be entitled to recover the trial advocacy fee (all other costs having been agreed following acceptance) , given that the matter had settled the day before and there are no arguments on the merits. In arguing that the matter had settled before 4 PM, the Defendant sought to persuade the Judge that the actual settlement by acceptance of Part 36 Offer was achieved by the email sent at 14:05 by the Defendant accepting the Claimant’s offer (point 4 above). This argument did not succeed.
The Court held that the Claimant’s Offer accepted at 14:05 was not a valid Part 36 offer. While it was in writing , it did not make it clear that it was made pursuant to CPR 36. It lacked the very basic requirement of saying so. It did not matter that it was part of a chain of emails.
The Court further held that the only Part 36 Offer accepted in this case was the Defendant’s Offer made at 15:58 and accepted by the Claimant at 16:17. That was the offer that settled the case.
PD5B is very clear regarding the email communications with the Court and it provides as follows :
4.2 Where an e-mail, including any attachment, is sent pursuant to this practice direction and the e-mail is recorded by HMCTS e-mail software as received by the court at or after 4.00pm and before or at 11.59pm—
(a) the date of receipt of the e-mail will be deemed to be the next day the court office is open;
(b) the date of issue of any application will not be before that date; and
(c) any document attached to that e-mail will be treated as filed on that date.
The Court decided that the matter had in fact proceeded to trial as the Part 36 offer was accepted after 4 PM the previous day, the court was informed on the day of the trial, the hearing went ahead, at least in part the issue of costs was disposed of at trial, and ruled that the trial advocacy fee was recoverable from the Defendant.
So it is a very useful reminder that it doesn’t matter how beautifully drafted and reasonable the offers are, if they do not say they are made pursuant to Part 36, they simply are not. It is a strict matter of form, rather than material content, that cannot be cured by the Court or anyone else. They do have value as offers, but they will not have the consequences of a valid Part 36 offer.
This particular case also reminds us how important time is, and that in reality for the Courts the day ends at 4 PM. Had the parties reacted quicker, and had they had regard to PD5B section 4.2, there would have been a vacated trial and no trial Counsel fee to pay.