As Hugh Grant has recently discovered, a Part 36 offer is a powerful tool in the world of litigation / dispute resolution, after opting to accept such an offer to settle his claim against News Group Newspapers (NGN).
Jane Rees, Associate of Berry Smith LLP, considers the tactical move made by NGN’s lawyers and the seeming reluctance of Grant to accept such an offer.
Grant’s case revolved around allegations that journalists had used private investigators to tap his phone and burgle his house. Grant stated: “I would love to see all the allegations that they deny tested in court”.
However, before the case could reach trial, NGN’s lawyers made a Part 36 offer to Grant which appears to have been pitched at just the right level. Whilst the terms of the offer are not public, it seems they were on par with what Grant may have been awarded had he won at trial. In his recent post on X, (formerly Twitter), Grant confirmed that he had reached a settlement with NGN and that “The rules around civil litigation mean that if I proceed to trial and the court awards me damages that are even a penny less than the settlement offer, I would have to pay the legal costs of both sides.”
Grant went onto say; “My lawyers tell me that that is exactly what would most likely happen here. Rupert Murdoch’s lawyers are very expensive. So even if every allegation is proven in court, I would still be liable for something approaching £10 million in costs. I’m afraid I am shying at that fence.”
Clearly Grant would have preferred the case to be determined at trial with NGN possibly having to take accountability for the allegations made. Rather than risk that, NGN’s lawyers made the tactical offer, effectively snookering Grant.
So, what is a Part 36 offer?
A Part 36 offer is pursuant to Part 36 of the Civil Procedure Rules which govern civil litigation in England and Wales. Such an offer can be made at any stage during a civil dispute and the point of making such an offer is that it has significant cost consequences if rejected.
If such an offer is accepted, the case settles. If rejected, the offer cannot be revealed to the trial judge until the case has been determined, at which stage the trial judge will decide what costs order(s) to make.
If a Part 36 offer has been rejected and the terms of the offer were the same or better (even slightly) than the remedy awarded at trial, the winning party could be ordered to pay the opposing party’s costs together with interest.
It is important to consider the fact that a trial judge will have some discretion when considering what costs order to make once a case has been determined at trial and the terms of a rejected Part 36 offer are then revealed. The trial judge will consider the terms of the Part 36 offer, the stage within the proceedings it was made, the conduct of the parties and whether the Part 36 offer was a genuine attempt to settle the case.
Grant’s case is a stark reminder of the cost risks involved in litigious matters and careful consideration must be given to any Part 36 offer made. Whilst it seems that Grant would have preferred a determination at trial as to NGN’s conduct, the risk was all too high for him to take.
It is important to note that there are various requirements that must be met when making a Part 36 offer, failing which the offer may be deemed invalid. As such, it is imperative to obtain legal advice prior to making such an offer in order to ensure that it has the desired impact.
Should you require advice with regard to a potential civil dispute, Berry Smith’s Dispute resolution Team can assist.
Please contact us on 029 20345511 or disputeresolution@berrysmith.com
Tel – 029 2034 5511
