Defining offers to settle
The civil litigation rules positively encourage earliest possible settlement between the parties. The provisions require for all parties to consider and if possibly act towards settling and avoiding litigation.
Without prejudice offers to settle are an example of measure to ensure that effect. Those are also known as Part 36 offers because the provisions are contained in Part 36 of the Civil Procedure Rules.
How to make an offer
Any party to the proceedings can make an offer to settle. Further, it could be made at any stage of the proceedings which includes before the commencement of proceedings. There are certain conditions to be complied with for the offer to be classed as a Part 36 offer and attract financial advantages as such. Those include:
The offer must be made in writing. There is a specific form N242A, however, an ordinary letter could also be sufficient
The offer must state that it is intended to have the consequences of Part 36 as considered below
If made at least 21 days before trial, it must specify a period of not less than 21 days within which the other side will be liable for their costs in accordance with rule 36.10 if the offer is accepted
The offer must state whether it related to the whole of the claim or a part of it or merely relate to liability
The offer must also state whether it takes into account any counterclaim
Further it clearly needs to specify the terms on which the settlement is proposed and those need to be as clear as possible. In addition, the offer should specify a period of validity within which it could be accepted by the other party.
Effect of non-compliance with any of the requirements
Whenever a court is considering the validity of such order, a party may seek to establish that such was never made due to non-compliance with the above listed requirements. The judicial consideration on the matter has shown that there is a wide discretion of the court to correct errors in procedure. Therefore, an offer could be upheld even if minor procedural breaches are present. However, the courts have made it clear that significant breaches as well as a conjunction of a number of minor ones could invalidate the offer as Part 36 offer.
Nevertheless, it is a matter for the discretion of the judge to consider the defects and their impact on the validity of the order.
Responding to an offer to settle
A without prejudice offer is accepted by serving a written notice of acceptance. Currently there is no prescribed form, so a letter would be sufficient. Further, a notice of acceptance needs to be filed with the court.
If a Part 36 offer relating only to a part of the claim is accepted, it could result in a settlement of the claim in its entirety only if the offeror abandons the balance of the claim. If the balance is not abandoned and the case proceeds to trial the court has discretion on the costs of the compromised part of the claim.
For more information on:
- Rejection of an offer and consequences