The New Part 36 Rules – What’s Changed?

Part 36 of the Civil Procedure Rules has been amended once more, with all offers made on or after 6 April 2015 subject to the new regime.  But what do the new rules entail?

1. Time Limited Offers
CPR 36.9(4)(b) now permits an offer to be “automatically withdrawn in accordance with its terms” after the end of the relevant specified period of acceptance.

This marks a departure from the previous rule 36(3)(6) which provided that any withdrawal of an offer must be communicated after the end of the specified period of acceptance.

Offers with terms now expressed as ‘this offer shall remain open for acceptance for a period of 21 days, after which time it is automatically withdrawn’ are now valid in their entirety.  No further steps need be taken to formally withdraw the offer after the end of the relevant period.

Note however that the new rule 36.9(4)(b) does not provide that all offers are automatically withdrawn after the end of the specified period.  It merely provides that stating that an offer is subject to automatic withdrawal is now permitted.

2. Improved Offers
CPR 36.9(5) provides that where the offeror changes the terms of a Part 36 offer to make it more advantageous to the opposing party, such an offer will be regarded as a new offer rather than a withdrawal or amendment of the original offer. 

A series of distinct improved offers remain regarded as multiple offers, any one of which may be accepted, and attract costs consequences, if not withdrawn. The former rule 36.7(2) provided that a change in terms of a specific Part 36 offer was an amendment to one offer. 

The new rule 36.9(5) provides that communication of improved terms of a Part 36 offer in fact creates two offers that remain open until withdrawal or acceptance. 

3. Late Acceptance
CPR 36.14(5) provides that where a Part 36 offer is accepted outside of the specified period, the court must make an order that the accepting party pays the costs from the end of the specified period up to acceptance, unless it would be unjust to do so.

The previous rules simply provided that the usual order would be made ‘unless the court ordered otherwise’, leading to some to consider that this provided for a broad discretion.

4. Split Trials
CPR 36.16 now permits a Judge hearing the trial of a preliminary issue to be told of the existence of any Part 36 offer, but not necessarily its terms.

Under the previous regime, a Judge had to decide whether to make a costs order in respect of the trial of a preliminary issue in ignorance of the existence of any Part 36 offer that had been made to compromise that issue, if that offer also contained proposals to compromise the entire claim.

The new rule permits a Judge to be told of the existence of all offers when deciding costs of trials of a preliminary issue.  A Judge may be told of the terms of the offer where that offer is confined to the compromise of the preliminary issue.  The rule will apply to all split trials taking place on or after 6 April 2015, even if the offer was made prior to this date.

5. Genuine Attempts to Settle
Rule 36.17 replaces the previous rule 36.14 on costs consequences following judgment.  In considering whether it would be unjust to make the usual costs award, 36.17(5)(e) “whether the offer was a genuine attempt to settle the proceedings” is now a factor.

This new criterion appears to be designed to disincentivise very high claimant offers; an attempt to compromise the claim is unlikely to be regarded as genuine if it does not account for some litigation risk , unless the evidence is very strong in all heads of claim.

6. Failing to File Costs Budgets
It remains the case under rule 3.14 that where a costs budget is not filed in time, a litigant may be treated as having filed a budget limited to court fees only. 

Rule 36.23 provides an incentive for an offeree to settle where the offeror has been made subject to an order limiting their costs to court fees only.  Where the defaulting offeror has made a Part 36 offer that is accepted late, the offeror shall be entitled to recover 50% of any costs incurred after the expiry of the relevant period.

7. Appeals and Counterclaims
CPR 36.2(3) has brought clarity to the position faced by counterclaimants and claimants in additional claims.  The new rule provides that counterclaimants and claimants in additional claims may receive the benefit of the more favourable costs consequences of claimant Part 36 offers, even when they are not the named claimant in the primary action.

Whilst the previous rules provided that Part 36 offers could be made in appeal proceedings, there is now more detail as to how the rule is to be applied.  In particular a claimant/defendant in first instance Part 36 offers shall equate to appellant/respondent respectively.  It is anticipated that where there are cross-appeals, it will be possible for a respondent to make a claimant Part 36 offer in the same way as the new rule operates for counterclaims.



The Clinical Negligence Pre-Action Protocol – What’s Changed?

The pre-action protocol for the resolution of clinical disputes has changed, along with several other pre-action protocols.  The changes came into force on 6 April 2015.  At the present time you will not find the new protocol easily on the MOJ website (the previous protocol is most easily located), but you will find it here from page 40 onwards: http://www.justice.gov.uk/courts/procedure-rules/civil/pdf/preview/pre-action-protocol-amendments-6-...

A summary of the most notable changes follows:

1. ‘Letter of Notification’
A new creation features at paragraph 3.10 of the protocol.  Following the medical records stage and (in many cases) receipt of an “initial supportive expert opinion”, and prior to the letter of claim, the claimant “may wish to” send a letter of notification to the defendant and NHSLA or relevant defence organisation.

On receipt of any letter of notification the defendant should:
(a) Acknowledge receipt within 14 days;
(b) Identify who will be dealing with the matter and to whom any Letter of Claim should be sent;
(c) Consider whether to commence investigations and/or obtain factual and expert evidence;
(d) Consider whether any information could be passed to the claimant which might narrow the issues in dispute or lead to an early resolution of the claim; and
(e) Forward a copy of the Letter of Notification to the NHSLA or other relevant medical defence organisation/indemnity provider.

Diligent NHS trusts often commence their own legal investigation during the NHS complaints procedure, or upon receipt of a request for medical records which contains sufficient detail to enable them to understand the issues which the claimant is seeking to pursue. 

However, whilst the protocol provides that the prospective defendant should merely ‘consider’ commencing their own investigation and gathering evidence, the benefit to the claimant in sending a letter of notification may come further down the line.  Paragraph 3.12.2 of the protocol provides that the court may question any request by the defendant for an extension of time if a letter of notification was sent but did not prompt an initial investigation.

A template letter of notification is supplied at annex C1 of the protocol.

2. Letters of Claim and Letters of Response
Letters of claim and letters of response should now state which disciplines of expert evidence have been relied upon.  Curiously, the letter of response should also state whether the expert report relates to breach of duty or causation, or both.  There is no such provision requiring the claimant to provide this additional detail.
3. Stocktake
Another new creation is the ‘Stocktake’ which features at paragraph 6.1.  In short, after the other steps of the protocol have been followed, “the parties should review their positions before the claimant issues court proceedings”.  It is hard to imagine that representatives will not think about their case if resolution cannot be achieved pre-action!

The second, final, and almost certainly the most important provision of the stocktake comes at paragraph 6.1.2.  It provides that the parties should seek to prepare a chronology of events which identifies the facts or issues that are agreed and the extent of any disputed facts and issues.

4. Duty of Candour/Apologies
  A new stated aim of the protocol appears at paragraph 2.2(b):
“to provide an opportunity for healthcare providers to identify whether notification of a notifiable safety incident has been, or should be, sent to the claimant in accordance with the duty of candour…………”

In short, the consideration of a claim at the pre-action stage affords the defendant a further opportunity to consider if an “unintended or unexpected incident” resulting in harm has occurred.  If such an incident has occurred then ‘the duty of candour’  provides that all of the facts should be given to the patient about the event and that an apology should be forthcoming.   This could greatly assist the claimant in pursuing their claim.

It is of course a criminal offence for the health service body not to notify the patient of the safety incident and offer an apology.  

Encouraging the offering of an apology is mentioned again, this time outside of the obligation under the duty of candour at paragraph 2.2(l).  To my mind an apology is distinct from an admission or finding of breach of duty and the payment of damages, which are really the only functions of a tortious claim.  It is certainly noteworthy that the protocol encourages the defendant to go further than their ordinary tortious obligations.

5. Litigants in Person
Claimants and defendants do from time to time act as a litigant in person.  Paragraph 1.8 provides that a litigant in person will be expected to follow the protocol, however, the represented party should send a copy of the protocol to the litigant in person as soon as possible.

6. ADR
Arbitration is mentioned as a possible alternative to litigation in relation to clinical disputes for the first time.  More longstanding alternatives of mediation and early neutral evaluation are rarely utilised and it is hard to imagine that arbitration will be any more popular.




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