Part 36 offers are commonly used to settle disputes in England and Wales, before or after proceedings have commenced. However, a party can only accept a Part 36 offer if it is validly drafted.

In the recent case of Knight and another v Knight and others [2019] EWHC 1545 (Ch), the claimants' Part 36 offer was struck out by the court because it included provisions which limited the payment of costs. So, how do you avoid getting “struck off your high horse” and what constitutes a valid Part 36 offer?

Claimant's Part 36 offer

Under Civil Procedure Rule (CPR) 36.5, a claimant's Part 36 offer is only valid if it satisfies the following requirements:

  1. The offer is in writing.
  2. The intention of a Part 36 offer is clearly mentioned.
  3. It specifies that the defendant will be liable to pay the claimant's costs if the offer is accepted within 21 days (the relevant period).
  4. It clearly states the aspect of the claim the offer relates to, whether whole or part.
  5. It states whether a counterclaim is taken into consideration; and
  6. Where the offer is for non-monetary consideration, it contains necessary information to assist the offeree when considering the offer.

In the recent case of King v City of London Corporation [2019] EWCA Civ 2226, it was also held that a valid Part 36 offer cannot be made exclusive of interest.

Defendant's Part 36 offer

In addition to the above requirements, under CPR 36.6, a defendant's offer is only valid if:

  1. Where an offer of monetary value is made, it is stated that a single sum of money will be paid to the claimant; and
  2. Upon acceptance of the offer, the sum will be paid within 14 days.

Why Present a Part 36 Offer?

Whether you are a claimant or defendant, a Part 36 offer could prevent you from incurring unnecessary costs and as importantly, paying the costs of the other party.  A valid Part 36 offer will afford cost protection and is one of a number of tools available to litigants, to manage the process and increase their prospects of “success”.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.