Offers, Are They Really Worth It?

A Part 36 offer encourages dispute settlement outside court by imposing adverse cost consequences if rejected. Hugh Grant's case against News Group Newspapers illustrates its impact, as he settled to avoid nearly £10 million in legal costs.
UK Corporate/Commercial Law
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A Part 36 offer is a type of offer made during disputes which aims to encourage parties to settle these disputes outside of the court process.

If a party does not accept an offer, then they risk facing adverse cost consequences. As a result, it is vital that any party receiving a valid Part 36 offer carefully considers whether the offer should be accepted or not.

This was illustrated in the recent case involving the actor Hugh Grant.

Hugh Grant vs News Group Newspapers

In this case, Hugh Grant was suing News Group Newspapers (NGN) on the basis that journalists had used private investigators to tap his phone and burgle his house.

Hugh Grant admitted that whilst he would 'love to see all the allegations that they deny tested in court' he has chosen to settle the privacy case outside of court because 'the rules around civil litigation mean that if I proceed to trial and the court awards me damages that are even a penny less than the settlement offer, I would have to pay the legal costs of both sides.'

Hugh Grant confessed that he risked paying nearly £10 million in legal costs, for both sides, if he did not beat at trial the settlement offer made by NGN.

Summary

During litigation, making an offer is obviously a positive action as it can avoid parties going to court, incurring substantial legal costs and the outcome being uncertain. However, in this instance, it creates the question – did an offer prohibit justice being served? NGN made an offer that Hugh Grant simply could not beat at trial, thus causing him to choose between pursuing his case, seeing justice served and exposing NGN, or accepting their offer to avoid being penalised on costs.

Is this an example of a positive rule being used for a negative purpose? Who knows, but the message is clear. Always consider offers very carefully.

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.

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