CPR Update Solves Part 36 Confusion

The 57th update to the Civil Procedure Rules will come in to force on 1 October 2011.  Although fairly innocuous, new rule 36.14(1A) will at last end the confusion caused by the decision in Carver v BAA plc [2008].  It also marks the introduction of recommendations suggested by Lord Justice Jackson in his report on civil costs, the bulk of which are due for implementation in late 2012.

In the Carver case the Claimant refused to accept a Part 36 offer in settlement of her personal injury damages.  At trial the damages she was awarded fell below the level of the Part 36 offer, but when interest was taken into account it actually rose very slightly above the offer.  She had therefore technically “beaten” the offer and would be entitled to legal costs on an indemnity basis and extra interest under the established rules governing Part 36 offers.

However, by the time of the trial relatively new amendments had been made to Part 36.  The Court of Appeal considered the new wording and decided that the protection under Part 36 should not be afforded in cases where objectively there was no sense in the offeree rejecting the offer when compared with the amount awarded.  The rationale was that delaying settlement and running the risk of litigation, for the sake of £50 or so more in damages, was not a justifiably reasonable decision by the offeree that should attract the benefits afforded by Part 36.  In short, was the litigation worth the fight?

Cue a whole load of confusion – “Hang on, so if I reject an offer, issue Court proceedings, win, and also beat any previous offers made, I am not entitled to the benefit of the Part 36 rules?  Why is that?  When is the cut-off point for a justifiable refusal to accept an offer?”

Lord Justice Jackson recommended an amendment to the Rules to bring it back in line with how Parliament intended, i.e. if you beat a previous offer by any margin, no matter how small, you are entitled to the additional benefits of Part 36.  As of 1 October 2011, that will again be the case.

If you have any queries in relation to this or any other personal injury matter call David Mayor or any of our Personal Injury Solicitors for a free consultation on freephone 0800 975 2463, or contact us by email for free expert legal advice.

David Mayor

About David Mayor

David is Head of the Preston Office's Civil Litigation team and deals with all types of private Civil Court disputes. David’s blogs cover his expertise in all aspects of personal injury law from low value Road Traffic Accidents right through to complex large loss claims. David also writes and has a vast array of experience in Public Liability (trips and slips), Employer's Liability (accidents at work), and Motor Claims (motor vehicle accidents, pedestrian accidents).
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