Posted Tuesday 3rd March 2020
It has recently been confirmed by the Court of Appeal that an offer made to settle a dispute that is exclusive of interest cannot be a valid Part 36 offer; King v City of London Corporation [2019] EWCA Civ 2266.
Under 36.5(4) a Part 36 offer is treated as inclusive of interest until the expiry of the relevant period (21 days or less). The Court gave guidance to the effect that Part 36 is a self-contained procedural code that is carefully structured and a highly prescriptive set of rules. It is important to remember that CPR 36 takes precedence over the Practice Direction.
The Court has now made it clear that if you wish to receive interest on offer, the interest should be included within the amount offered for the relevant period to ensure that it is CPR 36 compliant.
To ensure a Part 36 offer is valid, interest must be calculated and expressed as inclusive prior to the expiry of the relevant period. This is a welcome clarification from the courts amidst previous conflicting first instance decisions relating to the inclusivity of interest in Part 36 offers.
This article is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action.
