Part 36

Calderbank

Content requirements

• Must be in writing;
• Must be made clear that the offer is made pursuant to Part 36 of the Civil Procedure Rules;
• Specify a relevant period (not less than 21 days) for which the paying party will be liable for the receiving party’s costs if the offer is accepted;
• State whether it relates to part or whole of the claim;
• State whether it takes into account a counterclaim.

• Must be in writing
• An offer can be made to include any terms.

Accepting an offer

• Acceptance must be in writing;
• If an offer is accepted once trial has started, it must be done with the permission of the court; 
• Full payment must be made within 14 days (or such offer period as had been agreed) of acceptance of the offer.

• Acceptance must be in writing

Withdrawing an offer

• Before the expiry of the relevant period the offer can be withdrawn or its terms changed only with the court’s permission;
• The court’s permission is not required if the offer is withdrawn outside of the relevant period or if the offer is amended and is more advantageous to the offeror;
• Once withdrawn, a Part 36 offer will not attract its costs and interest consequences.

• Parties may specify a period of time for which the offer is open and include an expiry date after which the offer is withdrawn.

Cost consequences of accepting offer.

• If an offer is accepted within the relevant period, the claimant is entitled to costs of their proceedings up to the date of acceptance on the standard basis;
• If an offer is accepted outside the relevant period, the parties must agree the liability for costs or, failing an agreement, the court decides.

• There are no set cost consequences when accepting a Calderbank offer, generally, the parties will agree on costs.

Cost consequences of not accepting an offer

• If a claimant does not accept a defendant’s offer and wins but fails to beat it at trial, the court will likely order the claimant to pay any costs (on the standard basis) incurred by the defendant from the date of which the relevant period expired plus interest;
• If a defendant does not accept a claimant’s offer to settle, and the claimant gets judgment that is equal to or better than its offer, the court will usually order the defendant to pay the following from when the relevant period expired up to judgment:
• the claimant’s costs on the indemnity basis;
• interest on those costs at a rate not exceeding 10% above base rate;
• Enhanced interest on the whole or part of the sum awarded, not exceeding 10% above base rate;
• An additional amount to be decided on the amount awarded, usually between 5% - 10% to a maximum of £75,000.
• None of the following situations affects the usual presumption under CPR 44.2, i.e. the losing party should be ordered to pay the winning party’s costs on the standard basis:
• If the claimant wins but fails to beat its own offer;
• If a claimant does not accept a defendant’s offer and loses at trial;
• If the claimant beats a defendant’s offer at trial,
• Because Part 36 is silent concerning them, and therefore does not affect this presumption where they occur.

• The court can decide what weight to give the offer when deciding on costs, there are no strict costs consequences.

• Generally, if a successful party is awarded more by the court than it is offered, the court’s discretion regarding costs is exercise in its favour.

• If the successful party fails to beat the offer at trial, the court should take this into account and disallow a portion of the successful party’s costs.