On 5 April 2015 revisions to Part 36 of the Civil Procedure Rules come into force. It will be important for claims handlers and litigators to have an understanding of the key changes. Mellisa Spence highlights the main revisions:
Automatic withdrawal - CPR 36.9 (4) (b)
Currently a Part 36 offer remains open unless specifically withdrawn after the expiry of the usual 21 day period. However, it will now be possible for offers to be drafted so they are automatically withdrawn on a certain date. Of course, costs protection is most likely forfeited if an offer is withdrawn, so there would need to be a specific tactical reason to time limit an offer in such a way.
Changing the offer - CPR 36.9(5)(a)and (b)
There has for some time been a lack of clarity as to the standing of an original offer where a subsequent offer is then made. The new rules provides that, where an offer has been changed, and the terms of the offer are improved, this does notautomatically withdraw the original offer, but will be deemed to be a new offer open for acceptance for 21 days or longer from the date of written notice of the change in terms.
Split trials – CPR 36.16
Ordinarily, trial judges are not told of the existence of any offers, although no doubt it is usually assumed that offers will have been made. The revision to the rule now permits a Judge to be told of the existence of, but not the terms of, a Part 36 Offer after judgment has been given on the preliminary issues in a split trial.
‘Genuine’ offers – CPR 36.17 (5) (e)
This amendment allows the court to consider whether the offer was a genuine attempt to settle the proceedings. This should assist defendants in resisting claims for indemnity costs where offers have been made at the outset of a case to accept 95%/100% liability for example, and where little is offered by way of concession.
Fixed costs – CPR 36.13(3)
Helpfully, this revision confirms that, except where the recoverable costs are fixed by the Rules, costs are to be assessed on the standard basis if not agreed. Following the introduction of fixed fees in fast track claims, this new provision provides much needed clarity and reassurance to those seeking the protection of Part 36 when making offers.
Late acceptance – CPR 36.14 (5)
This makes it clear that, where a Part 36 Offer is accepted late, the court must make the usual order for costs unless it would be unjust to do so. The usual order is that the offeree has to pay the offeror’s costs from the expiry of the relevant period up until the date of late acceptance.
Pre-action costs – CPR 36.17
These are now clearly recoverable under the new rule. This will allow parties to further benefit from making pre-litigation Part 36 Offers.
Judicial interpretation of some of the provisions will be keenly anticipated and there is a danger in satellite litigation in relation to some issues. However, it has now been specified that Part 36 is a stand-alone code and the usual rules of contract do notapply.