Application to extend time, Part 36, alternative dispute resolution and settlement (SGS 7)

If D wins on liability

D not liable to C and loser pays winner's costs (CPR 44.2(a)). Part 36 offer has no effect. NB - penalties are greater for D who unreasonably rejects Part 36 offer than for C. Incentivises C not to go to trial (makes tactical sense for C to routinely make Part 36 offers).

CPR 40.3

Drawing up and filing of judgments and orders. Every judgment or order will be drawn up by the court with a few exceptions.

CPR 36.14

If Part 36 offer is accepted, claim will be stayed.

CPR 44.7

Party must comply with cost order within 14 DAYS of date of judgment/order or date of certificate which states the amount.

CPR 44.6

Procedure for assessing costs. Court may make summary assessment of costs or order detailed assessment by costs officer.

Terms of Part 36 offer (example)

- sum of £90,000 including interest ("the settlement sum") in full and final settlement of all claims which our client has or may have against your client - the settlement sum does not include costs. Your client will pay out client's costs on the standard basis, to be assessed if not agreed, up to the date of notice of acceptance of this offer if accepted within relevant period. If you client accepts this offer after relevant period, court will make order as to costs, if parties do not agree such liability under CPR 36.13(4) and (5). Failure to accept: if fail to do better than this offer at trial, CPR 36.17

PD 36A para 1

A Part 36 offer is made and accepting using Form N242A. Notice of acceptance/notice of withdrawal/change of terms must be served on legal rep of the other party.

CPR 36.11

Acceptance of Part 36 offer must serve written notice of acceptance to offeror. May be accepted at any time unless withdrawn.

CPR 15.5

Agreement extending period for filing defence. D and C may agree extension up to 28 DAYS. D must then notify court in writing.

Service of interim app

Before 3 CLEAR DAYS before hearing (CPR 23.7; PD 23 A para 4.1). For telephone hearing 5 CLEAR DAYS before hearing (PD 23A para 4.1A). Date, time, venue will be set out in Notice of Hearing.

Acceptance

Can be accepted at any time irrespective of whether offeree has subsequently made a different offer; unless offeror has formally withdrawn offer in writing (CPR 36.9)

Informal offers to settle

Can be made at any time, without prejudice (privileged from trial judge so will not influence costs).

CPR 40.6

Consent judgments and orders. Rule for where all parties agree the terms in which a judgment should be given or an order should be made.

CPR 36.13

Cost consequences of Part 36 offer. If accepted within relevant period, claimant is entitled to costs of the proceedings up to date on which notice of acceptance was served. If amount of costs not agreed assessed on standard basis. If offer made less than 21 DAYS before trial, costs determined by court.

Withdrawal/amendment

Court permission not required if relevant period has expired and offeree has not served Notice of Acceptance. Court permission is required prior to that (CPR 36.10).

CPR 44.2

Court's discretion as to costs. has discretion as to whether payable, amount, and when. General rule is loser pays winner.

C loses on liability

D not liable to C, C pays some/all of D's costs and interest at standard rate from date of expiry of relevant period (CPR 36.17(1)(a). Court has no power to award interest on costs of enhanced rate in this case (where D makes Part 36 offer) - J Murphy & sons v Johnston Precast Ltd.

If D loses on liability

D pays C damages, if after awarded this is less than Part 36 offer D will pay all/some of C's costs. Part 36 offer has no effect. If damages are same as offer, CPR 36.17(1)(b) unreasonable D did not accept C's offer so ordered to pay same or more than C's offer. Additional award that does not exceed £75,000 or 10% of money awarded for debt/damages claim. CPR 36.17(4) court can order penalties: C's costs on indemnity basis from date relevant period expired plus additional interest on those costs at max 10% above base rate.

C wins on liability

D pays C damages, if greater than Part 36 offer, D pays damages awarded and loser pays winner (CPR 44.2(a)). Or, if same as offer, CPR 36. 17(1)(a) C is penalised on costs because unreasonable did not accept. C can be ordered to pay D's costs from expiry of relevant period and interest of standard rate (CPR 36.17(3)).

CPR 36.3

Definitions. "Offeror" = party who makes offer. "Offeree" = party to whom offer is made. "In progress" = from time when trial starts until judgment given. "Decided" is when all issues in case are determined. "Relevant period" in the case of an offer made not less than 21 days before trial, the period under CPR 36.5(1)(c) or longer period as parties agree; otherwise it is period up to end of trial.

Unjust orders

Discretion of trial judge to penalise party of unreasonable rejection of Part 36 offer (CPR 36.17); judge takes into account - terms, stage in proceedings when offer made, info available to the parties, conduct of parties in exchange of info.

PD 32

Evidence PD - evidence in general, affidavits, witness statements.

CPR 32

Evidence.

CPR 3.1(2)(a)

Except where rules provide, court may extend or shorten time for compliance with any rule, PD or court order.

CPR Part 23

General rules about applications for court orders.

Notice of Acceptance

If D accepts C's offer, will serve and file Notice of Acceptance; D then pays agreed damages and C's costs to date. If D declines C's offer, will go to trial where D may win or lose on liability.

Expiry of relevant period

If offer is accepted after relevant period has expired and parties cannot agree costs, court will make an order. Usual order is D pays Cs costs to date on which relevant period has expired but that offeree pay offeror's costs from that date (CPR 36.13(4)).

CPR 44.8

If party is not present when cost order made, legal rep must notify that party in writing no later than 7 DAYS after receives notice.

CPR 23.4

Interim application with notice. Notify opponent. 1. Application notice (Form N244 - CPR 23.6, PD 23A para 2.1), 2. draft order, 3. evidence (in form of witness statement CPR 32.6), 4. court fee.

CPR 23.6

Interim application without notice.

CPR 40.7

Judgment or order takes effect from day when it is given.

Relevant period

Minimum of 21 days within which, if offer is accepted, D will be liable for C's costs to date (CPR 36.5(1)(c)).

Part 36 Offer

More formal system of settlement offers with potential penalties for rejections. Mady by C or D at any time including before proceedings begin. Made by standard form Notice of Offer to Settle or in form of a letter.

Acceptance of Part 36 Offer

Must be accepted by serving written notice on offeror and file copy with court (CPR 36.11 and PD 36A para 3.1).

D's offer to pay

Must be offer to pay single sum of money within 14 DAYS of acceptance (CPR 36.6). An offer to pay all/part of sum to do later than 14 DAYS, acceptance is not of a Part 36 offer unless offeree accepts the offer (CPR 36.6(2)). If C accepts offer, files and serves Notice of Acceptance. D pays C's agreed damages and costs to date. If C rejects, goes to trial.

Offer (Part 36)

Must specify a period of at least 21 DAYS within which, if offer is accepted, D will be liable for C's costs to date (CPR 36.5(1)(c)). Will be treated as inclusive of interest until minimum 21 DAY period expires (CPR 36.5(4)(a)).

CPR 36.2

Nothing in CPR 36 prevents a party making an offer to settle in whatever way chosen; but if offer is not made in accordance with CPR 36.5 it will not have the consequences of this section. Offer can be made in respect of whole/part/issue that arises in claim/counterclaim/additional claim.

PD 36A para 3

Notice of acceptance must be served on offeror and filed with court where the case is proceeding. If permission by court is required, make application under Part 23, or at trial or other hearing provided it is not to the trial judge.

CPR 36.8

Offeree may within 7 DAYS of Part 36 offer being made, request offerror to clarify. If offeror does not give clarification requested within 7 DAYS of receiving request, offeree may apply for order that offeror do so.

CPR 36.7

Part 36 offer can be made at any time including before commencement of proceedings. Offer is made when served on offeree.

CPR 36.9

Part 36 offer can only be withdrawn or terms changed if offeree has not previously served notice of acceptance. Offeror must formally withdraw in writing.

CPR 36.4

Part 36 only has consequences in relation to costs in proceedings in respect of which it is made, not in relation to costs of any appeal from those proceedings.

CPR 40.11

Party must comply with judgment or order for payment of amount of money (including costs) within 14 DAYS of date of judgment/order.

PD 40B para 1

Rule 40.2 sets out the standard requirements for judgments and orders and rule 40.3 deals with how judgments and orders should be drawn up. A party who has been ordered or given permission to draw up an order must file it for sealing within 7 days of being ordered or permitted to do so. If he fails to do so, any other party may draw it up and file it.

PD 40B para 3

Rule 40.6(3) sets out the types of consent judgments and orders which may be entered and sealed by a court officer. The court officer may do so in those cases provided that: (1) none of the parties is a litigant in person, and (2) the approval of the court is not required by the Rules, a practice direction or any enactment.

CPR 36.1

Self-contained procedural code about Part 36. offers to settle.

CPR 1

The overriding objective. Deal with case justly and at proportionate cost.

Interim application hearing

Usually before district judge/master. If less than 1 hour by telephone (CPR 3.1(2)(d)). Both parties must deal with costs of application.

CPR 36.10

Withdrawing or changing the terms of a Part 36 offer before expiry of relevant period.