Part 36 Offers Will Broadhurst Change Behaviours?

26 February 2016

Will the Broadhurst decision change Part 36 behaviours?

If I am not mistaken (which is entirely possible) this is the first case where a Claimant has beaten their own Part 36 offer for damages. I know of numerous instances where it has happened in Costs disputes but not the substantive claim.

When I read the decision and some of the comments, for example from my learned friend “The Prof” Dominic Reagan who called it “..stupendous..” the first thing that I wondered was;

Will it make any difference or change behaviours?”

If it doesn’t then it could be of little consequence. I tend to agree with the view from the Association of Personal Injury Lawyers president Matthew Stockwell who said it was ‘…difficult to overstate how important this is given proposed extension of fixed costs…’

As a lawyer who worked predominantly on the defence side for over 20 years, it was a constant frustration that opponents would not make settlement proposals even when Part 36 was first introduced, but arguably the stakes were not high enough. That is no longer the case and if fixed costs are extended, as most expect, I think this tool will be employed by more and more good Claimant lawyers for the benefit of both themselves and their clients.

So what are the potential consequences of claimant offers to settle?

  • Quicker settlements               good for the client
  • Shorter case life cycles          good for the lawyer in fixed fee cases
  • Defendant has a choice         they can conclude the case and move on or roll the dice

Where could this get interesting?

Some compensators rely heavily on damages calculation tools, on occasions slavishly, and they could now be at serious risk from well calculated Claimant Part 36 Offers which, if successful, could hugely increase their claims spend with orders for indemnity costs.

What do I think will happen in practice?

The reason this is the first time the issue has come before the court is that in truth any good defendant lawyer ought to be capable of valuing an opponent’s case, and indeed building in a tolerance for the Court where it may be heard, and so assessing any offer received. There is then a threshold within which it is simply not economic to proceed. As such any reasonable offer ought to be accepted.

I do think it will encourage more claimant offers to settle which is a good thing.

The combined result of the above ought to be quicker settlements for Claimants but I would be surprised if there were regular indemnity costs orders.