Making a Part 36 and a Calderbank Offer on the same date

This is not a new idea and has been around for a number of years. I have seen this on the increase recently.

The difficulty with this approach is getting an opponent to understand the reasoning behind it.

For example if you have a claim where settlement is worth £100k you could make a Part 36 for £90-95k and a Calderbank or time-limited offer for £100,000.  The second offer, of course, not having an automatic and prescribed effect on costs because it falls under the normal “discretion” and “take into account” category. i.e. it depends what side of bed the Judge got out of that morning.

The benefit of the Part 36 offer is that it carries serious cost consequences if there is a failure to beat this at trial. This allows a long period from which indemnity costs may apply as more trials get delayed (I think it’s about an average of 80+ weeks from start to finish for multi-track trials).

I have received a number of calls in the past fortnight from opponents all asking about the double-layered offers. They all try and helpfully point out to me that they are for different amounts (oh, I hadn’t realised that when I signed off 2 separate letters!) and then they ask why we are making 2 different offers.  When the effect of CPR Part 36 is explained and I identify the risk to them it usually meets an “oh, ok, right…” response as they do not really understand it but do not want to appear stupid.

So what happens?

No surprises, they choose the lower offer. This is done purely on economics without consideration of the costs consequences of Part 36. We have however caught out an opponent with this at provisional assessment of costs recently. We went overboard on this one, using my old guilty pleasure, which is an open correspondence offer. It never fails to make me chuckle. Try using it yourself; it normally provokes a phone call. While you may not think it is useful, it gets the parties talking about settlement, which is when you move the goalposts. Not always a bad thing when facing an intransigent opponent.

 

Over and out,

Legal Orange.

 

 

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One thought on “Making a Part 36 and a Calderbank Offer on the same date

  1. Pingback: CIVIL PROCEDURE, COSTS & SANCTIONS: LINKS TO RECENT ARTICLES AND POSTS | Civil Litigation Brief

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