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Consequences Of Acceptance And Non-Acceptance? | HK News

What are the Consequences of Acceptance and Non-Acceptance?

| Published on April 1, 2020

In litigation, claims are often settled either before or outside of the Court procedure. Making an offer can be a useful tool to bring the claim to conclusion without incurring the high level of costs associated with bringing Court action.

A party may make an offer to settle in whichever way he chooses. One of the methods of making an offer is making it under Part 36 of the Civil Procedure Rules. Either party can make an offer.

A Part 36 offer must be in writing, clear that it is being made pursuant to Part 36, specify a period not less than 21 days for a response (‘the relevant acceptance period’), state whether it relates to the whole or part of the claim, and state whether it takes into account any counter claim.

Part 36 offers remain open for acceptance, and can be accepted at any time, once the relevant acceptance period has expired, unless expressly withdrawn by the party making the offer.

Acceptance:

Once the offer has been accepted the claim is stayed and the defendant will have 14 days in which to pay the accepted sum.

If the offer is accepted within the relevant acceptance period the claimant is entitled to their costs up to the date on which notice of acceptance is served. Costs, if not subject to fixed costs, should be agreed by the parties or, if not agreed, assessed by the Court.

If the claimant accepts the defendant’s Part 36 offer after the relevant acceptance period expired, Part 36 states that the defendant pays the claimant’s costs up to the date on which the relevant acceptance period expired. The Claimant would then be liable to pay the defendant’s costs from the date of the expiry of the relevant acceptance period until the date of acceptance.

If the defendant accepts the claimant’s Part 36 offer after the relevant acceptance period expired, the defendant would be expected to pay the claimant’s costs up to the date of acceptance.

Non-Acceptance

If the offer is not accepted and the matter proceeds to trial, if the claimant obtains a judgment that is more favourable than the offer made by the defendant then it will be seen as justified to have not accepted the offer. In this circumstance the defendant would normally be required to pay the claimant’s costs.

However, if the claimant receives a judgment that is less favourable than the offer made by the defendant the court is likely to make an order for split costs. This means that the claimant may be liable for the defendant’s costs from the date of expiry of the relevant acceptance period and interest on those costs. The defendant would be ordered to pay the claimant’s costs up to the expiry of the relevant acceptance period. Interest would not be payable on those costs.

If the claimant made a Part 36 offer, which was not accepted by the defendant, and receives Judgment that is less favourable than that offer then the claimant is entitled to interest on the judgment sum, costs, interest on those costs, and an additional amount as ordered by the Court.

The Part 36 offer procedure is used often in litigation matters as a way to encourage the defendant to reasonably settle the matter. The costs consequences make this process attractive to claimants and beneficial to defendants who may otherwise have to pay significantly more costs if the matter proceeded to a trial.

For further advice please contact the dispute resolution team at our offices in Dorchester on 01305 251007 or Poole on 01202 725400.

Visit us at www.hklaw.eu and follow us @HumphriesKirk on Facebook, Twitter and Linkedin.

Article by Stephanie Dixon, Paralegal at Humphries Kirk. 

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