Settlement Offers: Changes to CPR Part 36

Whilst changes to CPR Part 36 have been afoot for some time, we finally saw the new rules come in to force applying to offers made on or after 06 April 2015.

• It is re-iterated that an offer not meeting the required form and content will not have the consequences of CPR Part 36. Offers are deemed to inclusive of interest and no longer need to ‘state on its face’ that it is intended to have the consequences of Part 36 only that ‘the offer is made pursuant to Part 36’.

• In relation to recoverable benefits, a defendant must state either that the offer is made without regard to any liability for recoverable amounts or that it is intended to include any deductible benefits. Without an up to date CRU certificate careful considerations needs to be given before making any offers net of deductible benefits.

• Withdrawing an offer before the end of the relevant period under the previous rules could only be done with the court’s permissions. Now, a notice withdrawing an offer or changing its terms will only take effect on expiry of the relevant period. If the offeree serves a notice of acceptance before the end of the relevant period, the acceptance takes effect unless the offeror applies to the court for permission to withdraw it (within 7 days of notice of acceptance or if earlier before the first day of trial)

• The court will only grant permission for the offer to be withdrawn or its terms changed if there has been a change of circumstances since the offer was made and it is in the interests of justice to give permission.

• Effectively reversing the decision in C v D [2011] EWCA Civ 646, a Part 36 offer can now include terms which withdraw it automatically. Prior to C v D parties could pinpoint a stage of the case within the terms of the offer when that offer would no longer be open to acceptance. This is particularly useful when considering commercial risk. For example, in the context of low value claims in particular, a defendant may stipulate that the offer will be automatically withdrawn on the day preceding the exchange of witness statements. Given the legal spend at this point, the cost benefit in early settlement would be diluted if not eroded. Furthermore, an offer set out in these terms could create uncertainty in the claimant thereby encouraging acceptance.