Disease - June 2011
The alternative to Part 36 offers
CPR Part 36.2 states :
- An offer to settle which is made in
accordance with CPR Part 36 is called a Part 36 Offer
- A Part 36 offer must
(a) be in writing
(b) state on its face that it is intended to have
consequences of section 1 of part 36
(c) specify a period of not less than 21 days
within which the offeree will be liable for costs in accordance
with rule 36.10 if the offer is accepted.
Part 36.3 states :
- A Part 36 Offer :
(a) may be made at any time, including before
commencement of Proceedings
6. After Expiry
of the relevant period and provided that the offeree has not
served Notice of Acceptance, the offeror may withdraw the
offer or change its terms to be less advantageous to the
offeree with out the permission of the Court
7. The offeror
does so by serving notice of the withdrawal of change of terms
on the offeree
Part 36.9 states :
2. A Part 36 offer may
be accepted at any time (whether or not the offeree has
subsequently made a different offer) unless the offeree serves
notice of withdrawal on the offeree.
The case of C v D & D2  EWHC
2940 confirms the strict application of the Civil
Procedure Rules (CPR). In particular, it highlights
that Part 36 offers cannot be time limited. For
example, if the offer remains open for 21 days, it is not a Part 36
In C v D which involved an
action for damages for breach of contract, the Claimant made an
offer to settle. This was expressed as a Part 36 offer.
Some time later and just before the trial, the Defendants
indicated acceptance of the offer, arguing that it was a Part 36
offer that had never been withdrawn and according to Part 36,
remained open for acceptance.
The Claimant argued the offer was not open for
acceptance as it was limited to a period of 21 days for acceptance
and therefore did not comply with the rules.
The Court had to decide whether an offer which
expressly stated “offer to settle under CPR Part 36”, can be
construed as a Part 36 offer in accordance with the CPR, or as the
terms of the offer were not strictly Part 36 compliant, did it fail
for being defective?
It was held that for an offer to be an
effective Part 36 offer, it had to be consistent with the rule
under which it was purported to be made. If it is not,
then regardless of intention, the Part 36 Rules do not
The current position following the decision is
that an offer will only held to be a Part 36 offer and compliant
with Part 36 the CPR if it is not time limited. That is, the
offer must be capable of acceptance unless and until it is formally
withdrawn in writing. The terms of the offer must be open for
acceptance at any time.
Warren J, found that the offer made on behalf
of the Claimant which was purported to be a Part 36 offer was
defective and made without a clear understanding of the application
of the Part 36 Rule.
Whilst a Part 36 offer which is CPR compliant
will remain open for acceptance if not formally withdrawn, it is
still subject to the costs consequences set out in Part 36
If you do not want an offer made in the past
to be accepted, it must be formally withdrawn (this may occur for
example if the Claimant’s case does not appear as strong as it once
was and you wish to make a lower offer). A later offer does
not automatically withdraw the previous offer.
If you wish to make an offer which is
compliant with Part 36 of the CPR, it is recommended that the offer
- Is not time limited.
- Is clear and concise in respect of the
damages being offered.
- Provides for settlement in respect of the
whole claim and not part of the claim.
- Is in writing.
- Does not include an offer in relation to
- Does not include an offer involving payment
over a period of time (for Part 36 offers involving future
pecuniary losses, such as periodical payments, consider Part 36.5
and Part 36.6 CPR).
If the purported Part 36 offer is not Part 36
compliant, there is no cure. It is better to remake the offer
in the correct terms.
The alternative to making an offer under Part
36 is to make a “Calderbank” offer. The offer is then made on
a contractual basis and is subject to the usual rules of offer and
The Calderbank letter should be headed
“Without Prejudice Save as to Costs”.
By using this heading, privilege is preserved
and the right to refer the offer to the Court on the question of
costs is expressly reserved.
Calderbank offers can include :
Any damages offers.
(b) Costs inclusive
damages and cost offers.
(d) Drop hands
If the offer does not include an amount for
costs, it must provide a provision for costs to be paid.
A Part 36 template letter is attached to this
article, but it is important that you still give careful
consideration to the wording which will vary depending upon the
particular case and offer involved.
Lorna Hives, Legal Executive, and
Gloria Ginvert, Partner, Weightmans LLP.
Court of Appeal decision in C v D has just been
handed down and a more detailed commentary will be circulated
In essence, the Court of Appeal held that an
offer said to be ‘open for 21 days’ meant it could not be withdrawn
within 21 days although after that period had lapsed, withdrawal
was on the cards. If it was not withdrawn, it was open for
This Court was more flexible than at first
instance over the application of the Civil Procedure Rules, finding
that what mattered was the intention and what a reasonable
solicitor would take this to be. To determine this it was
necessary to look at the surrounding words. If a time limited
offer is made and the intention is that it lapses after a
specifically stated time period then it is not a Part 36
offer. The earlier warning to ensure offers are CPR
Gloria Ginvert, Partner.