The Civil Procedure Rules (CPRs) are a set of guidelines by which the United Kingdom has granted more equitable and consistent access to their justice system by way of simplifying the process. They have made legal processes less expensive and easier for laymen to understand. Their primary focus was to promote the application of some particular provisions, but to also guide actions in those circumstances when the CPRs cannot be expected to offer a specific rule.
The slow and expensive process of resolving cases under the English civil justice system prompted Lord Woolf to conduct a two-year inquiry into the matter. He described the existing system as too expensive, with costs often exceeding the value of claims, as well as too slow and inequitable because of wealth disparities between claimants and claimees. When he published his report and draft rules, Lord Woolf emphasized the need to avoid litigation whenever possible, saying “My primary concern has been to improve access to justice, in particular for individuals and small businesses.” He continued by saying “I believe the key to this is enabling people to resolve their disputes in a more cooperative and less confrontational way than our traditional litigation system allows.”
Part 36 of the CPRs is a two-part section that creates a formal system to deal with offers to settle disputes outside of court based on Lord Woolf’s recommendations. It offers a prescribed process for making an offer to settle outside of court, with particular requirements. In turn, there are consequences for refusing to accept a reasonable offer to settle made in good faith. So Part 36 is aimed at having those disputes that can be settled out of court settled out of court rather than moving through the expensive and time-consuming process of protracted litigation.
This diminishes the cost of litigation to the taxpayers, as well as reduces the instances in which lower income individuals will suffer under the financial strain of litigation. This makes it more likely that people with fewer resources are able to bring action against another party when they previously would have been prevented from doing so due to limited means. As is discussed at some length in the ruling of Carver v BAA, “Compromise is seen as an object worthy of promotion for compromise is better than contest, both for the litigants concerned, for the court and for the administration of justice as a whole”.
A Part 36 settlement offer must be a good faith offer to settle. It must be made “without prejudice except as to costs.” And it must be in keeping with the guidelines that govern Part 36 of the rules of court. This makes it a precise offer as well as governed to some extent by a monitoring system within the court proceeding. The offerer can avoid the increased cost of a protracted court proceeding, which opens legal proceedings to people who might otherwise not be able to afford to seek legal sanctions. At the same time, it reduces the strain on the court system by removing those cases where a settlement is possible outside of court.
Part 36 must be assessed within the context of the larger civil justice process, which includes other methods of negotiation, mediation, and other forms of dispute resolution including moving through litigation. Although parties are free to enter into other types of extrajudicial settlements, they are not binding like Part 36. Written communication to offer settlements suffer from the liability of permitting any information given in the settlement offer to be used against the offerer, should the offeree not accept the settlement offer. There is some protection for the offerer in the form of making a settlement offer “without prejudice.” But this type of offer comes without the consequences should the offeree fail to accept a reasonable settlement offer.
The Civil Procedure Rules are intended to reduce the cost of court proceedings, and Part 36 is a tool by which that is accomplished. It is certainly a useful tool within the CPR for assisting out of court resolutions in civil disputes. While there are other places within the CPR that address the resolution of disputes outside of litigation, Part 36 is clearly the most effective of them because it prevents the exclusion of lower income citizens from the justice process. In doing this, it becomes the truest in representing the primary objective of the CPRs.
The inclusion of lower income individuals in the justice system being the point of the CPRs, it is reasonable to say that Part 36 is the best illustration of the presiding philosophies of those rules. Legitimate offers to settle have long been a part of the litigation process, but Part 36 introduces them in a way encourages early settlements and therefore reduces legal costs. In cases where money is involved, offers to settle are binding economic bids with the ultimate intention of reaching an agreement between parties that will lead to the case being dropped after a formal agreement is reached. In addition to this, as mentioned earlier, there are consequences if the opposing party refuses to accept the offer. In these cases, the case continues to litigation and ultimately a judgment is reached, which is pointedly less favorable than the offer. At that point, the party offered a settlement will have the additional costs of legal actions beginning when the offer was made.
When the case is a non-monetary one, the judge in the case is charged with the job of comparing the judgment with the settlement offer and deciding which is most favorable. If the settlement is accepted, the claimant will recover his costs from the defendant to the date that the offer was made. Such offers are not available to the judge until such time as the liability in a situation has been decided. More importantly, once an offer of settlement is made, there is no procedure by which it might be presented as evidence to the judge unless it is within the proceeding to determine the costs. This is to reduce the instances in which the trial judges end up believing that the defendant has admitted any level of liability. If this stipulation is not followed, the judge has complete discretion to order a new trial for the parties. Although the judge would be unlikely do so, it is paramount that the prejudice can only operate against the party who has made the premature disclosure.
Offers to settle are exceptionally popular in common law jurisdictions, particularly in those jurisdictions where English rule is followed. This means that the loser in the court proceeding pays the legal costs of the wining party. On the other hand, in civil law jurisdictions, offers to settle are all but unknown.
It is of great importance to critically analyse the statement: “Part 36 is the supreme achievement of the Civil Procedure Rules in assisting out of court resolutions in civil disputes, and thus best illustrates the presiding philosophy of those rules, that restricting legal costs promotes better access to justice.” While it appears to be a very simple and straightforward process, Part 36 is not always as easy as it looks. The case of Gibbon v Manchester City Council illustrates one of the potential pitfalls of Part 36. The claimant made an offer after the city council had accepted liability for the injuries she received as a result of tripping and falling on a playground. However, in an attempt to be awarded a larger settlement, she attempted to reject the council’s acceptance of her first offer without ever formally withdrawing it. The court ruled that her offer was still open for acceptance by the city council. Part 36 doesn’t explicitly articulate how to deal with situations such as this, so there are areas for improvement.
Whether Part 36 simplifies the rules of civil justice and promotes equitable access to justice is debatable. On the one hand, Part 36 can significantly reduce the legal costs of issues that would have previously required litigation. On the other hand, Part 36 can be manipulated to protect offerers from having to pay larger awards in addition to incurring expensive litigation costs rather than as a way to dispense justice. This leaves the claimant to decide between accepting less than what they should be entitled to and going all in and hoping that they can emerge victorious through litigation. Oftentimes, the course of least resistance is chosen and claimants will settle for less money just to put the matter behind them. In this regard, Part 36 has in fact provided a mechanism for low income individuals to recover damages in a binding way not previously available except through litigation. On the other hand, wealthy individuals and corporations can leverage their position to goad claimants into accepting offers lower than the estimate of their claims which ultimately saves them money. Part 36 has most decidedly improved the English system of civil justice, but there are still loopholes which haven’t fulfilled Lord Woolf’s vision of creating a truly equitable and accessible system of justice.
References
Part 36 Civil Procedure Rules (England and Wales) 1999.
Carver v BAA Plc [2008] EWCA Civ 412
Gibbon v Manchester CC: LG Blower Specialist Bricklayer Ltd v Reeves [2010] EWCA Civ 726, [2010] All ER (D) 218, [2010] 1 WLR 2081
Sime, Stuart. ”Civil Procedure Rules in Action." (2000). Print.
Sime, Stuart. "Disputes of Fact in Interim Applications." The Civil Procedure Rules Ten
Years On (2009): 270-81. Print.
Peter Crouch v King’s Healthcare NHS Trust [2004] EWCA Civ 1332.
Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd and another (No 7) [2008]
EWHC 2280
The Trustees of Stokes Pension Fund v Western Power Distribution (South West) Plc [2005]
EWCA Civ 854.
Lord Woolf, Access to Justice: Interim Report to the Lord Chancellor on the Civil Justice
System in England and Wales, (HMSO, 1995)
G. Slapper & D. Kelly, The English Legal System (Oxford, Routledge-Cavendish, 2009).
B. Main and A. Park, The Impact of Defendant Offers into Court on Negotiation in the
Shadow of the Law: Experimental Evidence, 22 (2002) International Review of Law
and Economics 189.
