Settlement offer - how to accept so that it is binding

[mikehunt69]

I instituted a legal claim for £14k, plus court fee (~£1k), plus interest (~£7k) (Litigant in person) (Total claim is thus almost £22k)

 

The claim was almost statute barred when filed, and if filed today would be statute barred.

 

The claim is currently subject to a 1 month stay until February and the defendant has written to me offering to settle for £16k. I am inclined to accept.

 

They have sent me a letter (via email) which reads

 

"Without prejudice except as to costs

 

...

Without any admission of liability or wrongdoing we confirm that we would be prepared to offer you the sum of £16,000 in full and final settlement of all claims which you have or may have against us in relation to the Claim.

 

Please confirm your agreement to the terms of this settlement by:

 

1. signing a copy of this letter and returning it to us at the postal address above

 

2. writing to County Court Business Centre (“CCBC”) to inform them that you want to discontinue the Claim.

 

Once we have received a signed copy of this letter from you and we obtain confirmation from CCBC that the Claim has been dropped, we shall arrange for the payment set out above to be made into your bank account (details of which you will need to provide to us).

"

 

And then at the bottom there is a space for me to sign. (And none for them)

 

So very simple.

 

I just wonder if this is valid and binding on them, or do I need to turn it into a Part 36 Offer?

[mikehunt69]

Should I perhaps send them a copy of form N242A, making a Part 36 Claimant's Offer for £17k or £18k (so a little more)?

 

Their offer does not mention Part 36, nor does it specify a time limit.

[dx100uk]

Why do you think £22k might not be possible?

[mikehunt69]

Why do you think £22k might not be possible?

 

Do you mean as a settlement now? Or in court later?

 

I don't know what normal practice is by defendants in settling cases.

 

 

The defendant from what I can see, does not want to go court.

 

 

But I don't know if it is heard of for a defendant to accept a claimant's offer when the offer is for 100% for the claim value including interest.

(Certainly I have in the past settled a claim for a higher % of the value; the distinguishing feature of this claim is six years worth of interest at 8%, which is quite a chunk of change in this era of zero base rates)

 

With respect to Part 36,

I don't really have any costs apart from the filing fee,

but I don't know if I make the Part 36 offer and they accept it, whether it complicates things

[BazzaS]

Should I perhaps send them a copy of form N242A, making a Part 36 Claimant's Offer for £17k or £18k (so a little more)?

 

Their offer does not mention Part 36, nor does it specify a time limit.

 

So, it doesn't fulfil the requirements to be a Part 36 offer, (if it doesn't meet every requirement, it can't be) but can still be a valid Part 44 ('Calderbank') offer.

 

The way it can be made to be binding is by a Consent Order ('Tomlin Order'), where the agreement is lodged with the court.

Usually these don't discontinue the claim but do 'stay' it indefinitely unless the order is breached. The Tomlin order also creates a new contract.

 

If the order is breached, the side suffering loss can either

A) ask for the stay to be lifted on the original case, or

B) commence new proceedings for breach of the contract created by the consent order.

[Ganymede]

Make it as a Part 36 offer as once it's accepted the claim is automatically stayed.

 

You also have the advantage that if they don't pay the accepted Part 36 offer is essentially a judgment that you can enforce.

[Ganymede]

So, it doesn't fulfil the requirements to be a Part 36 offer, (if it doesn't meet every requirement, it can't be) but can still be a valid Part 44 ('Calderbank') offer.

 

The way it can be made to be binding is by a Consent Order ('Tomlin Order'), where the agreement is lodged with the court.

Usually these don't discontinue the claim but do 'stay' it indefinitely unless the order is breached. The Tomlin order also creates a new contract.

 

If the order is breached, the side suffering loss can either

A) ask for the stay to be lifted on the original case, or

B) commence new proceedings for breach of the contract created by the consent order.

 

That will cost another £100 upfront though, whereas Part 36 is free!

[BazzaS]

That will cost another £100 upfront though, whereas Part 36 is free!

 

Absolutely, though (GM will be aware of these, but the OP needs to bear in mind):

A) the other side may not accept the OP's part 36 offer, and

B) the OP will need to ensure their part 36 offer meets EVERY technical requirement contained within part 36, or it will become a Calderbank offer,not a part 36 offer.

[mikehunt69]

I am confused about the Part 36 offer.

 

Claim is:

 

£14k + £1k court fee + £7k statutory interest = £22k

 

Their offer is I guess a Calderbank offer for £16,000 in full and final settlement.

 

If I send them N242A Part 36 offer, what do I say?

This:

"The claimant is willing to accept £18,500 in full and final settlement of the case."

?

 

I read here:

 

http://www.pumpcourtchambers.com/sites/default/files/DataLaw.Part36Notes.2012.pdf

 

22. Where a Part 36 offer is accepted within the relevant period, the following costs

consequences will flow (please see the scenarios below).

(a) Offer by a claimant which is accepted by the defendant within 21 days and

where the offer has been made preLaction and no proceedings have been

issued:

(i) The defendant will pay the amount offered within 14 days; and

(ii) The defendant will pay the claimant’s costs on a standard basis

(to be assessed if not agreed).

(b) Offer by a claimant which is accepted by the defendant within 21 days and

where the offer is accepted after proceedings have been issued:

(i) The defendant will pay the amount offered within 14 days;

(ii) The proceedings will come to an end; and

(iii) The defendant will pay the claimant’s costs on a standard basis (to

be assessed if not agreed).

© Offer by a defendant which the claimant accepts within 21 days of the

offer by filing written acceptance at court and serving a copy on the

defendant’s solicitors:

(i) Proceedings are stayed;

(ii) The defendant will pay the amount to the claimant within 14 days;

(iii) The defendant will pay the claimant’s costs up until acceptance on

a standard basis (to be assessed if not agreed).

 

 

So we are in case (b) or ©.

 

But I don't want to imply I have any costs?

 

Would this be valid as a Part 36 Offer?

 

"The claimant is willing to accept £18,500 in full and final settlement of the case.

 

If this offer is accepted within 21 days, claimant's costs will be paid in full by claimant"

[Ganymede]

Your £1000 Court fee is a disbursement, not damages, so technically you have incurred some costs.

 

You need to check the requirements for a Part 36 offer. You should find loads of information on Google.

[mikehunt69]

I see

 

"If a party makes an offer to settle inclusive of costs, such offer will

not be in accordance with Part 36, and it will be in the court’s

discretion (not pursuant to Part 36) as to whether any costs or

other advantages will be given to the party making the offer if the

offer is unreasonably rejected. "

 

So I make an offer for £18,000 on form N242A, and accompany it with an email saying "To date claimant's costs are limited the £1000 court fee. The claimant will not incur any further costs during the period of stay" would that be ok?

 

Hence they pay me £18,000 + my £1000 court fee.

[SuperVillain]

I would just make the offer using the N242A, and deal with costs in separate correspondence if/when they accept the offer.

[mikehunt69]

Ok, so I fill it in, print it out, sign it, scan it back in and email it to the defendant? Nothing to the court?

[SuperVillain]

Correct, nothing to the Court. The Defendant has 21 days from service of the offer to accept.

[SuperVillain]

Not pressing but something to consider whilst you're waiting for the Pt 36 offer to expire - have a read of Civil Procedure Rule 46.5 regarding the costs that litigants in person may be awarded... As stated above the Court Fee is just a disbursement.

[mikehunt69]

So what costs would normally be awarded at this point, apart from the filing fee?

[mikehunt69]

So I sent an offer for '£18,000 plus costs', plus a covering email saying

 

"I attach a claimant’s offer made pursuant to Part 36.

 

With regards to an agreement as to costs, I will accept £1000 in settlement of claimant’s costs to date if the Part 36 offer is accepted within the next 21 days. This costs figure is provided in the interests of swift resolution of the case and should not be regarded as a statement of costs to date, nor of final costs in the event of trial, which will undoubtedly be considerably higher.

"

[mikehunt69]

ok well they have accepted my offer.

 

How do I notify the court?

[Ganymede]

ok well they have accepted my offer.

 

How do I notify the court?

 

Just write the Court a letter and tell them it's settled.

 

Are there any hearing dates set?

[mikehunt69]

no, it's stayed.

 

So I can just email them?

[SuperVillain]

Yep just email the Court.

 

As for receiving payment remember Part 36.14(6)(a):

 

(6) Unless the parties agree otherwise in writing, where a Part 36 offer that is or includes an offer to pay or accept a single sum of money is accepted, that sum must be paid to the claimant within 14 days of the date of—

(a) acceptance;