At some point during the course of your commercial legal dispute, your lawyer may receive a Part 36 offer from the other side. This is simply an offer to settle the dispute without having to go all the way to Court, and is usually a good sign.
Part 36 offers can also be made from your lawyer to the defendant to try and get them to settle the dispute earlier and with less risk to yourself.
Part 36 is not a random number, it comes from the Civil Procedure Rules that your lawyer has to follow and obey when conducting litigation for you. Part 36 deals with offers made on a without prejudice basis, which simply means any Part 36 offers will not be seen by the Court until after the judgment has been made and damages have been awarded by the Judge.
Part 36 Overview
A Part 36 offer is an offer that can be made by the claimant or the defendant as a tactical plan brought about to try and pursuade the other party to settle the legal dispute without the matter having to go to Court, which is risky for both parties.
This is a tactical play because if you receive a Part 36 offer and you refuse the settlement amount offered, if the trial Judge awards less than the Part 36 offer, then you will receive the lower amount and will have to pay the legal costs of the other side from the time the Part 36 offer was made. This should focus both the lawyers and disputing parties minds.
A Part 36 offer can be made at any time during the legal dispute, but they are always made without admission of liability, otherwise it would weaken the case if it did end up in court. Part 36 offers must be accepted within 21 days, although the side making the offer has the right to extend it beyond the 21 days.
Why would a claimant make a Part 36 Offer?
It is usually the defendant who makes the majority of Part 36 offers, but it can also be sensible for a commercial legal dispute claimant to make them on occasion.
If your case has weakened following some new evidence, meaning you don’t want to go to court, then making a reasonable Part 36 offer may encourage the other side to quickly settle, securing a modest win as opposed to a potential loss at court.
If the defendant is delaying the progress of your legal dispute to an unreasonable extent, you might decide to make a Part 36 offer to try and speed up the process.
When would I accept a Part 36 Offer from a defendant?
Any Part 36 offer will come in the form of a letter outlining the amount of damages the defendant is offering.
If you and your lawyer think that the Part 36 offer is enough to compensate you for your legal dispute, you have 21 days to accept it. If you do accept the offer, you can also recover some of your legal costs and expenses from the other side. The benefit of accepting a Part 36 offer is that you usually receive your damages and costs more quickly.
Be aware that when a defendant makes a Part 36 offer, it is not only an effort to save time but also to save money. It is therefore very likely that the amount you are offered will be less than the potential damages you may be awarded if you reject the offer, and proceed to trial. But this is of course a risk.
When would I reject a Part 36 Offer from a defendant?
If you have received a Part 36 offer from the defendant and do not believe the amount is sufficient to compensate you for your legal disputes losses, you can choose not to accept it and have your dispute heard in Court. The Judge hearing your dispute will not be told you have previously rejected a Part 36 offer until after the dispute has been settled.
If the Judge awards you damages that are higher than the Part 36 offer, even by just £1, then the offer will have had no effect on your dispute. You will receive the damages that the Judge has awarded, and be able to seek to recover some costs.
If the Judge awards you less damages than offered in the Part 36 offer, then you will only be awarded this lower amount. The Judge will also order that you pay the defendant’s legal costs from the date of when you could have accepted the Part 36 offer but didn’t, being 21 days after the Part 36 offer was first made to you by the defendant.