A lesson in Part 36 offers... from Hugh Grant

By Christian Eagle and Wahid K.

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Hugh Grant has announced that he has accepted an offer to settle his privacy claim against News Group Newspapers. In announcing the settlement of the claim, Hugh Grant touched upon his reasoning for accepting the offer for settlement and outlined potential consequences if he did not accept the offer, in a thread posted to X (formerly Twitter). In our latest LinkedIn article below, we explain exactly what a Part 36 Offer is and how it differs from other forms of settlement.

And we quote…

“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”.

From Hugh Grant’s explanation of the nature of offer accepted, it would appear that Hugh Grant accepted an offer made under Part 36 of the Civil Procedures Rules i.e. “a Part 36 offer” made by News Group Newspapers to settle the Claim.

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What is a Part 36 offer?

A Part 36 offer is a formal offer frequently made in litigation to settle all or part of a claim. Offers for settlement are encouraged in litigation as a means to save costs incurred throughout the litigation process, mitigate the risks in litigation, and importantly, as Hugh Grant has rightly noted, protect a party from cost consequences if the offer made differs to what a judge may award at the hearing.

A Part 36 offer differs from other offers for settlement, and they must comply with the strict rules contained in CPR Part 36. The requirements for a valid Part 36 offer are:

• The offer needs to be made in writing;
• The offer needs to state clearly that is made pursuant to Part 36;
• The offer needs to specify a period not less than 21 days for which acceptance will need to be made; and
• The author needs to address whatever is made in respect to part of the claim or all of the claim.

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What are the benefits of a Part 36 offer?

A Part 36 Offer is a very strategic tool in litigation and fundamentally can allow a party to dispose of time-consuming and expensive litigation by making an early offer, provided the party receiving the Part 36 offer accepts the offer.

Part 36 Offers are made on a ‘without prejudice save as to costs’ basis. This means that the Part 36 offer would not be brought to a judge’s attention at the hearing. However, after the hearing when costs are being considered, the conduct of the parties and whether any offers for settlement were made will be taken into consideration to determine the cost consequences.

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Hugh Grant vs News Group Newspapers

Hugh Grant as the claimant in this claim may have received a Part 36 offer from News Group Newspapers acting as the Defendant. Whilst Hugh Grant could reject the Part 36 offer made and seek his day in court, this would run the risk of creating a circumstance where the award ordered by the judge at the final hearing may be less than the offer of settlement. CPR 36.14A provides that a defendant’s Part 36 offer would be taken in to consideration when considering costs when the claimant fails to obtain a judgement which is more advantageous than the defendants.

Since the offer for settlement appears to be a Part 36 offer, the consequences of being awarded judgement which is an amount less than the Part 36 offer made by News Group Newspapers, may result in the courts ordering News Group Newspapers be awarded their costs from the date upon which the Part 36 offer expired (CPR 36.17(3)).

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Weighing up the costs of a court case

Since Hugh Grant stated that News Group Newspapers have spent somewhere in vicinity of ￡10million in costs, the risk of not accepting the Part 36 offer made and leaving the possibility of having to pay News Group Newspapers further costs from the expiry of the offer would have been far too great of a risk to leave open. Therefore, though News Group Newspapers have been spared their day in court, Hugh Grant is protected from having to pay the News Group Newspapers costs from accepting the offer for settlement.

Hugh Grant’s acceptance of the apparent Part 36 offer sheds light on strategy of such offers and how such offers when considered properly, prevent the possibility of adverse outcomes in litigation.

Though Hugh Grant’s heart is, and always will be, yours, an order for costs in favour for News Group Newspapers won’t be.

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This blog post was written by the Commercial Dispute Resolution team at Ralli Solicitors LLP and is not to be taken as legal advice - if you are engaged in proceedings or looking to engage in proceedings, please seek independent legal advice. Our professional team are dedicated to providing bespoke legal advice upon assessment of your individual circumstances. You can contact our Manchester office on 0161 832 6131 or our London team on 0207 535 0750, or you can email [email protected], and one of our team will respond.

https://ralli.co.uk/practice-areas/commercial-dispute-resolution/