Make an offer to settle – CPR Part 36May 11, 2013
The Civil Procedure Rules govern the conduct of litigation and Part 36 of those rules provides for consequences of offers made in accordance with that Part. Whether and at what figure you pitch an offer depends upon many variables and the facts of your case and you should take advice on this.
The advantage of making an offer is that if accepted it can conclude the case. Loser usually pays the costs so making an offer early in the case is sensible but what happens if an offer is not accepted?
If you’re a Defendant the tactical benefit is that such an offer puts pressure upon the Claimant to settle because if the offer is not accepted and the Claimant ‘wins’ an award from you at trial but the figure is less than your offer then the Claimant will have to pay its costs and your costs (plus interest) incurred since the offer.
Things have just improved for Claimants in this context. The April 2013 amendment to Part 36 means that if a Defendant fails to ‘beat’ a Claimant’s offer the Defendant will have to pay more of the Claimant’s costs plus interest on those costs plus interest on the damages awarded and now a ‘penalty’ of a further 10% on the sum awarded.
Even the strongest case carries significant risk of failure. That’s why no lawyer will guarantee success. Litigation is expensive in time, money and stress. If you’re in business it also amounts to distraction taking a focus away from where it is best directed, your business. The investment of resources can be disproportionate to the amounts or issues. It’s not for nothing that lawyers and judges describe litigation as a last resort and let’s be honest; someone who enjoys litigation has an odd personality trait there. However, if you find yourself in litigation having tried unsuccessfully to resolve a matter, there are good reasons to make an offer to settle and such offers are very common if sometimes misunderstood. Offers are not a sign of admission or weakness they are a useful tool at your disposal.
Keith Hardington 01756 700200 [email protected]