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P36 Offers Update – This is in your interest

13th April 2021

P36 Offers Update – This is in your interest

Reanne Upton, a Solicitor in the Dispute & Litigation team at Higgs & Sons, takes a look at an important amendment to the Civil Procedure Rules.

Last week saw clarification provided at long last on what some would consider a dubious provision in the Civil Production Rules.

As of 6 April 2021, any offer made under Part 36 of the CPR whereby interest is to accrue after the ‘relevant period’ must now include express terms to that effect.

If this is not specified in the offer, the receiving party will not be able to claim interest on the sum payable if the offer remains on the table and is then accepted at a later date.

The rule inserted at paragraph 36.5(5) of the CPR is as follows:

“A Part 36 offer to accept a sum of money may make provision for accrual of interest on such sum after the date specified in paragraph (4). If such an offer does not make any such provision, it shall be treated as inclusive of all interest up to the date of acceptance if it is later accepted.”

All other elements of a Part 36 offer remain the same, including the requirement that the offer made must be inclusive of interest at least for the relevant period of not less than 21 days.

Whilst this offers clarity to a provision that has been the point of dispute in case law previously, it makes it clear that any offer that does not express otherwise will be deemed to be inclusive of interest up to the relevant date and thereafter.

Thought should therefore be given to the recovery of interest in advance and care taken when drafting the offer to ensure that it does not fall into the trap of CPR 36.5(5).

 

 

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