CPR Part 36 changes

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Part 36 has been revised by the Civil Procedure (Amendment No 8) Rules 2014 as laid before Parliament on 18 December 2014 – I had advised of the changes in previous update.

Most of the new provisions apply to all Part 36 offers made on or after 6 April 2015. Here is a recap of some of the changes:

Time-limited offers The new CPR 36.9(4)(b) allows an offer to be automatically withdrawn after the expiry of the relevant period, in accordance with the terms of the offer. The old Part 36 rule did not permit such time-limited offers.
Split trials The old Part 36 rules stated that an offer must not be revealed to the trial judge until the case has been decided. The new CPR 36.16 allows the judge to be told of the existence of the offer, but not the terms, of any offer after judgment has been given on the preliminary issues. Where the offer relates to issues already decided at preliminary hearing the terms can be disclosed.
Very high % claimant offers The revised CPR 36.17(5) provides for the court to consider “whether the offer was a genuine attempt to settle the proceedings” when deciding whether ordering costs would be unjust. This aims to prevent cost consequences arising where a Claimant makes an offer to settle for the whole or almost entire value of the claim, such a high offer is rejected, but the Claimant still goes on to succeed in full.
Counterclaims CPR 36.2(3) follows CPR 20.2 and 20.3 in giving equal status to counterclaims, providing that offers can be made in respect of counterclaims or additional claims. Under the present rules this is subject to confusion and this change reinforces the ability of defendants to take advantage of the more favourable costs consequences of claimants’ Part 36 offers.
Appeals The revised CPR 36.4 clarifies that references to the claimant/defendant will be treated as references to the appellant/respondent, the first time this has been specifically provided for.
Improved offers CPR 36.9(5) states that where the terms of the offer are changed to make them more advantageous to the offeree, an improved offer shall be treated as a new Part 36 offer rather than the withdrawal of the original offer. This distinction means that cost consequences still apply to the older offer, since it has not been ‘withdrawn’.
Late acceptance CPR 36.14(5) states that where a Part 36 offer is accepted late the court must make the usual order of the delaying party paying costs, unless it would be unjust to do so. This represents a narrowing of the courts current discretion.
Costs budgets Currently if a party fails to file a costs budget in time it is limited to only being able to recover court fees. CPR 36.23 is less draconian, limiting recoverable costs to 50% of the possible costs that would be otherwise recoverable.

About the Author

akAlistair Kinley is BLM’s Director of Policy & Government Affairs.

Alistair is responsible for BLM’s engagement with government departments and regulators on policy and public affairs issues and consultations affecting the firm and its customers. He coordinated BLM’s market-facing activities in connection with the Insurance Act 2015 and the consultations which preceded its publication and introduction in Parliament.

He is a member of the Civil Justice Council (CJC), a regular speaker and experienced commentator on legal and procedural reforms and was a contributing editor to the Law Society’s Litigation Funding Handbook (September 2014).

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