Part 36 Offers - Payment Into Court.

Part 36 Offers - Payment Into Court.

If you are involved in civil litigation with a party and is locked into dispute over the value of a claim, for example a personal injury claim, you can make what is known as a Part 36 offer to that other party in the dispute.

It is a tactical measure which is frequently used by personal injury lawyers to resolve disputes over quantum or the value of a claim. If used effectively it can bring the other party in the action to his knees due to the effect it has on cost.

If therefore you are ever involved in a dispute over money as in the case of personal injury compensation and the other party makes a ’Part 36 Offer’ you or your solicitor needs to take this very seriously indeed.

What is a part 36 offer?

So what exactly is a Part 36 Offer? I explain this in some depth in my book ‘The Personal Injury Claims Guide for DIY Claimants’ which also provides other tactics in personal injury claims negotiations.

Basically, a Part 36 offer is made pursuant to Part 36 of the Civil Procedure Rules which were brought into effect in 1998 under Lord Justice Woolf.

Part 36 Payments to County Courts and High Court .

Previously, the procedure existed but was known as a ‘Payment Into Court’ under which a physical payment was made to the court following the offer letter. If proceedings were in one of the County courts then the payment was made to that particular court.

If the claim was of a higher value than the county court limits or it was a case involving complex issues as dealt with in the High Court then payments were made to the Accountant General of the Supreme Court.

More recently you do not need to make a physical payment into court and a suitably drawn Part 36 offer letter is sufficient for these purposes.

The Part 36 offer must be sufficiently detailed to enable the other party to see how the offer is made up. You cannot just state an amount in your offer letter and expect the other party to accept it without stating how you arrive at the offer made.

The offer would not be effective in these circumstances and you would lose the main benefit of a Part 36 offer which is to protect you in respect of costs.

Costs.

Once an effective Part 36 offer has been made the other party in the negotiation has 21 days to respond to the offer. He is not bound to accept your offer and may very well decline your offer and counter-offer with his own Part 36 offer.

If agreement cannot be reached the offers stay on record until the trial of the case.During this time the judge is not made aware of the offers as this would prejudice his decision at trial when awarding compensation otherwise known as damages.

If these offers were to be revealed to him he could favour one or either of the parties and make an award to benefit that party.

Judgment award.

Once the judgment amount is known if this lower than the Part 36 offer by even a penny then the other party must pay all his own costs and those of the party making the Part 36 offer. These costs include the full trial costs and all costs incurred from the date the Part 36 offer was made.

The burden of costs is therefore extremely high for the losing party who fails to beat a Part 36 offer. You cannot therefore afford to ignore a Part 36 offer and bury this in the files for months or years before going to trial.

All Part 36 offers need to be given the serious consideration they deserve at the time they are made.