A Lesson In Part 36 Offers From Hugh Grant

Whilst Hugh Grant may be known globally for his acting roles in films like ‘Love Actually' and ‘Notting Hill', he is now known in the world of litigation and dispute resolution for bringing Part 36 offers into the spotlight.
UK Media, Telecoms, IT, Entertainment
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Whilst Hugh Grant may be known globally for his acting roles in films like 'Love Actually' and 'Notting Hill', he is now known in the world of litigation and dispute resolution for bringing Part 36 offers into the spotlight.

Mr Grant, being the claimant, issued a claim in the High Court in 2022 against News Group Newspapers Limited ("NGN"), the defendant, for misuse of private information by journalists or other third parties, acting or working for and on behalf of The Sun newspaper. The claim was due to be heard at trial in January 2025.

Mr Grant took to social media platform X (formerly Twitter) on 17 April 2024 to share that he had been offered a sum of money from NGN to settle the claim. Mr Grant shared that he would have loved to have seen the allegations NGN denied tested in Court, but "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". It would appear that Mr Grant accepted a Part 36 offer.

What is a Part 36 Offer?

The Civil Procedure Rules ("CPR") govern civil litigation in England and Wales. The CPR are in place to enable the courts to deal with cases efficiently and in a cost-effective manner. The rules governing Part 36 Offers are found in Part 36 of the CPR.

A Part 36 offer is a formal offer made by a party to a dispute in an attempt to settle the whole or part of a claim. This can be made at any point of a dispute by either party, which includes before court proceedings have even been issued. The offer is made 'without prejudice save as to costs', which means that it cannot be used in proceedings as an admission of guilt and will only be brought to the Judge's attention once the case is decided and costs need to be considered. If the party to whom the offer is made decline the offer and then fail to achieve a better outcome at trial, the Part 36 offer can have certain cost consequences. The Part 36 offer must meet the conditions set out in Part 36 of the CPR in order to carry the cost consequences.

The conditions of a Part 36 offer

The conditions for a valid Part 36 offer are as follows:

  1. The offer needs to be made in writing;
  2. The offer needs to state clearly that it is made pursuant to Part 36 of the CPR;
  3. The offer must specify a period of not less than 21 days within which acceptance may be made ("the relevant period");
  4. The offer must state the extent of the offer – whether it relates to the whole or part of a claim and whether it takes into account any counterclaim;
  5. The offer must be a genuine offer to settle.

The consequences of a Part 36 offer

If a compliant Part 36 offer was made by the defendant to the claimant, for example in this case from NGN to Mr Grant, and Mr Grant rejected the offer and then did not obtain a better outcome at trial (even if Mr Grant's case was successful at trial but the Court awarded the same or a lower amount than the Part 36 offer), the Court must order that Mr Grant pays NGN's costs and interest, unless it seems unjust to do so (the threshold of which is high). The costs Mr Grant would therefore be liable for would be NGN's costs from the date when the relevant period expired up to the date of judgment. Mr Grant said if this was the case, he would have been liable for almost £10,000,000 in costs, and this was not a risk he was willing to take, hence accepting the Part 36 offer.

This is contrary to the usual stance in litigation that the losing party pays the winning parties costs. This way, Part 36 of the CPR encourages parties in litigation to carefully consider realistic settlement offers, as unjust rejection could lead to big monetary consequences for the party who rejected the offer, even if their case is successful in Court.

Mr Grant's acceptance of this perceived Part 36 offer sheds a light on how powerful Part 36 offers are in litigation, and demonstrates how much pressure they apply to the party receiving the offer to settle the civil claim, even if they would rather have their day in Court!

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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