CPR 36.17(4) | Claimant’s Part 36 Offer Which Amounted To 99.7% Of The Claim Was A Genuine Attempt To Settle

Genuine attempt to settle the proceedings

In this case Mr Justice Zacaroli determined that the Claimant’s Part 36 Offer to settle its claim in the sum of £48,290,000, which amounted to 99.7% of the amount claimed was a genuine attempt to settle the proceedings:

“In considering that question in the circumstances of this case, I take particular note, first, of the fact that there was no issue as to the quantum of the claim, so that there were only two possible outcomes: success … or failure … Second, I take note of the fact that … in light of the evidence contained in the witness statements filed on behalf of TBL, there was clearly no defence to the claim. From Rawbank’s perspective, therefore, there was no realistic possibility of failure. In other words, a discount of any amount would involve Rawbank giving up something which it had a near-certainty of obtaining. Moreover, while £158,059 is a very small amount in comparison with the principal amount of the claim, it is larger than the interest that would accrue during the period of the offer and is likely to have been greater than the costs incurred by Rawbank. Although the offer was not structured in this way … in circumstances where a claimant has near-certain chances of success, then an offer to settle on the basis that the claimant foregoes an amount equal to interest or costs is still capable of being characterised as a genuine offer of settlement. That conclusion is bolstered here by the circumstance that the claimant had a desperate need for the money and was at a loss to understand why its money had not been returned to it.”

The judge went on to consider whether the Defendant’s inability to pay meant that it would be unjust to make some of the orders identified in CPR 36.17(4). He decided that it was:

“Acceptance of the Part 36 offer could only be made by actually paying the sum referred to in it. In my judgment, the fact that due to circumstances beyond its control TBL is, and has been since the date of the Part 36 offer, unable by reason of its insolvency to pay that sum means that it would be unjust to make at least some of the orders identified in Rule 36.17(4). This is not a case where TBL fought on in the hope of beating the Part 36 offer…. That does not mean, however, that it is necessarily unjust to require all of the amounts set out in Rule 36.17(4) to be paid on the ground of TBL’s inability to pay. Taking into account all of the circumstances of the case, as I am required to do under Rule 36.17(5), I do not consider it would be unjust to require TBL to pay, as from 25 May 2020, (1) the costs of the proceedings on the indemnity basis and (2) interest on the principal sum owed at the Judgments Act rate of 8%.”