Hugh Grant Privacy Claim Hit By Part 36 Risk

Hugh Grant has settled his long-running privacy case against the publishers of The Sun. In his statement, he was clear that he did not want to settle but, if he hadn’t “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”.

So what are these rules? Kay Tucker, a Solicitor in our Public Law & Private Litigation team, takes a look at this particular aspect of civil litigation.

What is Part 36?

Part 36 of the Civil Procedure Rules (“CPR”) is designed to encourage parties involved in litigation proceedings to settle their dispute without the need for a trial. When an offer is made under Part 36, often a tactical decision will need to be made by the receiving party to decide whether it would be advantageous to accept.

It is this particular rule that Hugh Grant has referred to.

Under Part 36, both Claimants and Defendants can present to their opponent what they will accept or offer with a view to resolving the dispute.

When can a Part 36 offer be made?

The timing of making a Part 36 Offer should be carefully considered by the party doing so, to ensure that all the relevant information has been received before proceeding.

A Part 36 offer can be made at any time, up to the time of judgment – this includes before court proceedings are even issued. If a Part 36 Offer is made during trial, then the Court’s permission will be needed to accept.

What are the requirements of a Part 36 Offer?

 There are several requirements that a Part 36 Offer must meet to ensure it is compliant with the CPR.

Firstly, a Part 36 offer must be made in writing. It must stipulate that it is intended to have the consequences of Part 36 and clarify whether the offer is to settle the whole claim, or part of it and if so, which part and whether it takes into account any counter claim.

If a Part 36 offer is made 21 days or more prior to the start of a trial, it must also specify a “Relevant Period” of no less than 21 days within which the defendant will be liable for the claimant’s costs, if the offer is accepted.

If a defendant is making a Part 36 Offer, it must be for one single settlement payment to be made within 14 days of the offer being accepted.

What happens if I don’t accept a Part 36 Offer?

The consequences for the Claimant and Defendant of not accepting a Part 36 Offer of settlement will differ. In both cases however, the claim will continue to court for judgment.

What happens if a Claimant does not accept a Defendant’s Part 36 Offer?

If a Claimant does not accept and then at Judgment is awarded a greater settlement than was offered by the Defendant, then the Court will apply the usual costs award.

If the sum awarded is even, as Hugh Grant explained so well in his statement, 1p less than the Part 36 Offer made, provided that this was made more than 21 days before the date of the trial then is likely that the Claimant will be liable for Defendant’s costs from the expiry of the “Relevant Period”.

What happens if a Defendant does not accept a Claimant’s Part 36 Offer?

If the claimant has made a Part 36 Offer which the defendant did not accept, and then obtains a judgment which is not more advantageous than its offer, the court will apply the usual principles when ordering the defendant to pay the claimant’s costs.

However, if the claimant made a Part 36 Offer which was not accepted, and then obtains a judgment which is equal to, or betters the terms of its offer, the Judgment can order the Defendant to  pay:

• The judgment
• Interest on the judgment at no more than 10% above base rate from the expiry of the relevant period onwards
• The claimant’s legal costs from the expiry of the relevant period which will be assessed by the court more harshly on what is known as the ‘indemnity basis’
• Interest on those legal costs at no more than 10% above base rate
• An additional amount of up to a maximum of £75,000.

How can we help?

Whether you are the defendant or the claimant, any Part 36 Offer must be very carefully considered before being made or being accepted.

It must be reasonable and above all, pitched very carefully. If accepted, a Part 36 Offer can settle the Claim and avoid the costly process and risks that litigation can pose.  Part 36 is a very useful tool in settling litigation and is a very important tactical consideration at all stages of litigation.

Our Public Law and Private Litigation team are experienced in this area and can help guide you through the civil litigation process. If you have found yourself in a position where you are considering making, or receiving, a Part 36 Offer, please contact us today for advice.