CPR Part 36 is a specific section within the Civil Procedure Rules (CPR) in England and Wales that deals with offers to settle and the potential costs consequences of such offers. It is a crucial aspect of civil litigation and is designed to encourage parties to settle disputes without the need for a trial, promoting efficiency and cost-effectiveness in the legal process.
CPR Part 36 governs formal offers to settle made by one party to another. These offers can relate to the entire case or specific issues within the case. The rule outlines the potential costs consequences that may follow if a party rejects a reasonable offer and later fails to achieve a more favourable outcome at trial. Part 36 is designed to provide financial incentives for parties to consider settlement seriously. It aims to reward parties who make reasonable settlement offers and penalise those who unreasonably refuse such offers.
Part 36 has largely replaced the older practice of making Calderbank offers, which were informal offers made without the specific framework set out in CPR Part 36. Parties can make formal written offers to settle, specifying whether they relate to the whole or part of the claim, the relevant terms, and the period within which the offer can be accepted. If the offer is accepted within the stipulated time, the case is settled on the terms offered. If not, the consequences outlined in Part 36 may come into play.
If the offeror (the party making the offer) obtains a more favourable judgment at trial than their offer, they may be entitled to enhanced costs and interest. If the offeree (the party receiving the offer) rejects a reasonable offer and later fails to achieve a better result at trial, they may be subject to adverse costs consequences. Part 36 allows for an increase in damages (up to a certain percentage) as an additional incentive for claimants to accept reasonable offers.
CPR Part 36 plays a crucial role in promoting settlement and avoiding unnecessary litigation by encouraging parties to consider and respond to reasonable settlement offers. It contributes to effective costs management by providing a framework for cost consequences tied to settlement offers. The rule enhances the efficiency of legal proceedings by incentivising parties to engage in meaningful settlement negotiations at various stages of litigation.
In summary, CPR Part 36 is a significant aspect of civil procedure in England and Wales, aiming to foster settlement, streamline legal processes, and manage costs effectively in the resolution of disputes.
You can learn more about this topic with our Dispute Resolution notes.
