Find out how a Part 36 offer can be used to conclude your claim for personal injury together with the advantages and risks of offers being made
Discover what a Part 36 offer is; how it can be used to determine part or all of your personal injury claim; the requirements for a Part 36 offer to be valid; the implications of accepting an offer in time and out of time together with the significant advantages if you beat your Part 36 offer at trial.
What is a Part 36 offer in a personal injury claim?
A Part 36 offer in a personal injury claim is a formal without prejudice offer used in an attempt to determine an issue; part of the claim or more commonly the amount of compensation that should be paid to conclude the whole claim. It can be made by the person making the claim (the Claimant) or by the person the claim is made against (the Defendant).
It is made in accordance with part 36 of the Civil Procedure Rules For it to be valid it must remain open for a relevant period of at least 21 days and contain certain wording and detail as specified in Part 36 CPR.
Okay so what does all that legal jargon mean in plain English?
Without prejudice means that the offer cannot be used as evidence at court or at a trial before a judge as this might prejudice the claim – in other words, suggest that liability (legal fault) is already accepted or the amount the claim is worth already valued.
A judge will hear the claim without any knowledge of a without prejudice offer having been made. Only after the claim has been decided (both who is at fault and how much compensation the claim is worth) by the judge can any Part 36 offers be brought to the judge’s attention.
The reason the judge is specifically referred to the Part 36 offer after the trial is over – is that it will have relevance as to who is responsible to pay legal costs; the amount of legal costs to be paid and whether there are any cost penalties.
Hence why a without prejudice offer is often stated to be “without prejudice save as to costs”. In other words – it cannot prejudice the judge in making his decision as to who is at fault and the amounts of compensation that should be awarded, but will prejudice the judge in his determination of the amount of legal costs that should be paid and whether the Claimant or the Defendant should be responsible in full or in part for paying them.
Used to determine an issue, part of the claim or the whole claim
The best way to describe these options is with a few examples.
Example One – Part 36 offer to determine an issue in a personal injury claim
A worker traps his hand in a machine press losing a finger. The employer denies fault – arguing that the worker was not wearing requisite PPE (personal protection equipment) and should never have put his hand in the press.
The employer’s insurer makes a Part 36 offer that the employer accepts prime liability for the accident, but the worker contributed to his accident and so was 10% contributory negligent.
If this offer was accepted – legal fault would not need to be argued as the Defendant will have accepted fault – but that would be subject to a reduction in the level of the claim by 10% contributory negligence.
In this example an issue of the claim has been determined – but the amount of compensation and level of injuries has still to be decided.
Example 2 – Determine part of a claim
A car driver is hit from behind by a lorry and as a result the car driver suffers significant injury and is off work for a year. When an independent medical report is obtained – the medical expert comments that given the nature of the injuries the time period that was reasonable to be absent from work was only 9 months.
The lorry driver’s insurer may accept legal fault, but dispute the amount of lost income that is being claimed and a Part 36 offer for 9 months lost income made. If accepted the issue of lost income is determined and no further arguments from either party is necessary – in other words, the car driver will only recover 9 months lost income not 12 months.
Here part of the claim has been determined using a Part 36 offer.
Example 3 – Part 36 offer to determine the whole of a personal injury claim
A patient goes into hospital for a routine operation, which is not performed correctly – leaving significant permanent injuries, lost income, private medical expenses, rehabilitation costs, nursing assistance, etc.
A Part 36 offer is made by the Claimant solicitors for a global sum of compensation to include – personal injury (general damages), past and future financial loss (special damages), so all aspects of the claim. If this Part 36 offer is accepted – the whole of the claim is concluded (although payment of legal costs would still have to be calculated and argued).
This is the most common type of Part 36 offer you will likely encounter and the one that puts the most pressure on the parties to resolve a claim early.
A Part 36 offer can be made by the Claimant or the Defendant
A Part 36 offer can be made by the person who is making the claim (the Claimant or the Claimant’s legal representatives) or by the person who the claim is made against (the Defendant, the Defendant’s insurer or legal representatives). The person making the offer is called the offeror and the person receiving the offer is called the offeree.
The implications of not accepting the offer affect the Claimant and Defendant differently, which you will see later in this article.
A Part 36 offer must contain certain wording to be valid
There is very specific wording that must be included within a Part 36 offer for it to be valid. This may vary as the years pass by and are detailed by the Civil Procedure Rules.
A Part 36 offer must remain open for at least 21 days to be a valid offer
A part 36 offer must state the relevant period it can be accepted within, which must be 21 days or more.
If the you accept a Part 36 offer within this period – the Defendant will be responsible for your costs in making the claim up to that point.
If you wish to accept a Part 36 offer out of time – the Defendant will only be responsible for your costs up to the end of the relevant period. In other words – 21 days after the offer was made (if 21 days is the relevant period).
Be careful – only the legal costs that a Defendant has liability to be pay will be paid. Some types of legal fees might not be chargeable to the Defendant and could be deducted from your compensation as part of a no win no fee agreement.
What happens if you accept your Part 36 offer within the 21-day period?
If the Part 36 offer was an offer to settle the whole of your claim – acceptance in time means your claim concludes and within 14 days the person at fault should pay to you/your solicitor the compensation sum, this period however can be agreed to be different by your solicitor and the person at fault.
If it is not paid in time – your solicitor can enter a judgment for the unpaid sum at court and thereafter enforce payment. This however is an usual situation.
What happens if you wish to accept a Part 36 offer later than the 21-day period?
Generally, the person at fault will pay your legal costs up to the end of the 21-day period, but you would be responsible for legal costs from that date (both your own solicitor’s costs and those of the person you are making the claim against). This is known as the “usual order”.
There are some exceptions to this and some ways around having to pay costs. These should be discussed with your solicitor, but some examples might include: “the court considering it unjust to make the usual order” (this however is a difficult order to achieve); your solicitor could discuss with the Defendant the position of costs before accepting (often before issue at court the Defendant may not have incurred legal costs and your solicitor may waive any additional costs) or your solicitor could make a counter Part 36 offer for sum slightly larger – which if accepted would result in all costs being paid.
What happens if your personal injury claim goes to trial and the Defendant does not beat your Part 36 offer?
If your solicitor made a valid Part 36 offer, your claim goes to trial, the judge decides in your favour and orders compensation to paid in excess of a Part 36 offer made by your solicitor on your behalf – you have “beaten your Part 36 offer”.
The possible advantages of beating your Part 36 offer at trial might include: enhanced legal costs for your solicitor and enhanced interest on your compensation up to 10% above base rate (from the end of the expiry of the 21-day period of your Part 36 offer).
Be aware – current cases are showing the enhanced interest sum to be more like 3 – 4%
Part 36 Offer Summary & Next Steps
In this article you have seen how Part 36 offers can be made by a person making a claim and a person resisting a claim and the implications to each of accepting in time, out of time and beating the Part 36 offer at court.
Remember – if you are Claimant in a personal injury claim it is down to you to tell your solicitor whether to accept the Part 36 offer or not. Your solicitor will explain the risks – but the choice must be yours and you must provide your solicitor with your instructions.