Legal Cost Specialists

Part 36 offers in detailed assessment

A helpful summary from the Senior Courts Costs Office Guide 2013 on the consequences of Part 36 offers in detailed assessment proceedings:

“Either party may, at any time, make a formal settlement offer in accordance with Part 36. If the paying party makes such an offer and it is accepted by the receiving party within the specified period for acceptance, the receiving party will also receive its costs of assessment to the date of acceptance.

If the receiving party does not accept and the bill is assessed at no more than the paying party’s Part 36 offer, the normal rule will be that the receiving party must meet the paying party’s costs of assessment, with interest, from the end of the specified period for acceptance. If the receiving party accepts the offer after the period for acceptance expires, the receiving party will normally have to pay the paying party’s costs from that point.

If the receiving party makes a Part 36 offer, the paying party does not accept and the bill is assessed at as much as or more than that offer, the paying party will normally have to pay, from the end of the specified period for acceptance, interest at up to 10% above base rate on the bill as assessed, the costs of assessment on the indemnity basis and interest on those costs, again at up to 10% above base rate. It shall also normally have to pay an extra 10% of the bill as assessed (reduced to 5% for any amount over £500,000 and capped at £75,000).”

12 thoughts on “Part 36 offers in detailed assessment”

  1. i have seen quite a few paying parties trying to rely upon the uplift and indemnity costs provisions when making their Part 36 offers

  2. There will be a few issues as to whether Def’s Part 36 are valid

    Another issue – I get lots of Part 36 that are exclusive of interest – CPR provides that should be inclusive. Argueably invalid

    In any event it is still an offer to be taken into account

  3. abcde – actually the CPR states that they should clearly state whether they are inclusive of interest, and if they don’t they will be deemed to be inclusive. So no invalidation here.

    abcde, this is not aimed at you, but all of this just goes to show the level of misunderstanding around Part 36. It is not even difficult given the very clear wording of Part 36.

  4. @abcde

    I still recall the old case which says an offer inclusive of interest isn’t valid unless its backed by a payment on account because interest continues to accrue. The position on that case effects is muddied somewhat by the provisions of Part 36 certainly, but nevertheless the principals behind it remain sound enough to argue with

  5. CPR 47 Practice Direction 19 says: “Where an offer to settle is made … under Part 36 … it should specify whether _or not_ it is intended to be inclusive of … interest … . _Unless the offer states otherwise_ it will be treated as being inclusive …” [my emphasis].

    CPR 36.3(3), on the other hand, provides that “A Part 36 offer which offers to pay or offers to accept a sum of money _will_ be treated as inclusive of all interest …” [my emphasis].

  6. Chris, I am looking at Part 36. I admit I have to get familiar with the various aspects

    I look at 36.3
    2) A Part 36 offer –

    (a) may be made at any time, including before the commencement of proceedings; and

    (b) may be made in appeal proceedings.

    (3) A Part 36 offer which offers to pay or offers to accept a sum of money will be treated as inclusive of all interest until –

    (a) the date on which the period stated under rule 36.2(2)(c) expires; or

    (b) if rule 36.2(3) applies, a date 21 days after the date the offer was made.

    is this what you are referring to, albeit from a different angle?

  7. Unfortunately I don’t think 47.20 means you only get 10% on costs of assessment if that is what the first post suggests.

    The 10% applies to the sum awarded to the claimant in detailed assessment proceedings. Assessment proceedings are considered as a separate claim – ie the Part 36 offer only applies to costs not the rest of the claim and you do not get 10% on the damages if you win on a Part 36 in DA proceedings only on the costs sum awarded in detailed assessment proceedings, which is the costs of the main claim.

    Agree with the Blog – useful of the SCCO to clear this up as the provisons are not the easiest to fathom.

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