Part 36 Offers: Recent Case Law Developments

In any civil litigation case, the claimant and the defendant has the choice to make an offer to the other side to settle the dispute without going to court. This offer can either be accepted or rejected.

In November 2019, the High Court made a judgement in the case of Hochtief (UK) Construction Ltd & Anor v Atkins Ltd concerning offers of settlement called “Part 36 offers.”

Part 36 offers are formal legal offers to the other side, intended to settle your case without going to court. If, for example, your solicitor makes a valid Part 36 offer, the Defendant will consider it carefully because if you go to court and you beat your valid Part 36 offer, i.e. the Judge awards the opponent less money than you offered to settle for, the opponent will have to pay more for your legal costs.

These offers are important, as at the end of a case, a Judge would consider the offers made by the parties when making their decision on legal costs in cases where the claim is for £10,000 or more. In some cases, if you fail to beat the opponent’s Part 36 offer, you may be penalised even if you have won the case.

The reasoning behind this is to encourage people to settle earlier rather than try and waste time attempting to obtain a slightly higher award.

In the recent decision, the Claimant made a ‘part 36 offer’ worth £875,000 to the Defendant. The Defendant did not accept this offer and the matter went to court. The Claimant won the case at court, and received £4,847 more than their offer!

Although the Defendant argued that such a tiny margin should not mean that they would have to pay more of the Claimant’s legal expenses, the Judge, Mrs Justice O’Farrell, decided that they did and held that the offer was valid.

This case demonstrates how important it is to make sure your solicitor assesses the true value of your claim correctly.

Making the right offer could spell the difference between getting heavily penalised for further legal costs or walking away with the same level of compensation without even stepping a foot in court.

To ensure that your case and any offers of settlement are professionally handled, please contact our litigation team at Garden House Solicitors as soon as you are served with any court papers.