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Consider Part 36 offers carefully
The recent case of in Hochtief (UK) Construction Ltd & Anor v Atkins Ltd is a pertinent reminder to all people in litigation to consider offers to settle carefully.
A Claimant made an offer to the Defendant for £875,000, which was rejected. After two more years of litigation, the Claimant eventually succeeded in their claim and were awarded £879,848. They had only beaten their offer by just less than £5,000 but the costs consequences for them were serious.
A ‘Part 36 offer’, as its known, is a particular type of offer and carries with it certain costs consequences if not accepted and later beaten. If a party wins their case and beats a Part 36 offer, even if only marginally, then they are entitled to indemnity costs and interest on the damages. In this case, the Judge set interest on damages at 6% above base rate and ordered that costs be assessed on an indemnity basis. The Claimants therefore received an extra £65,123 as a result on top of their awarded damages.
It is a pertinent reminder of the dangers of declining an offer to settle and why parties should always consider whether it is worthwhile pursuing litigation to the end.
If you would like any advice in relation to a claim or offers to settle then contact our specialist Dispute Resolution team today on 020 8949 9500.