Wednesday, April 27, 2011

The one bit of good news from the forthcoming No win No fee reforms

Part 36 Offers

Almost unnoticed in the furore caused by Ken Clarke's recent assault on No win No fee lawyers came the news that "Part 36 offers" are to be given more weight in litigated cases. Harking back to the early phase of the Woolf Reforms when insurers actually believed that P36 proposals mattered.
Clarke's proposals introduce two changes that act as enticements:
A defendant that does not beat a claimant's Part 36 offer is already liable to pay the claimant's costs on the indemnity basis and interest on those costs and damages awarded at a rate of up to 10% above base rate. 
Now though an additional costs sanction of 10% of the value of the claim will be paid by defendants who do not accept a claimant's Part 36 offer that is not beaten at trial. 
If a money offer is beaten at trial, even by a small margin, the costs sanctions under Part 36 will apply. This reverses "Carver" and ensures that the P36 mechanism remains a very useful tool in accelerating settlements.
Whilst not easily digestible by The Sun and other rags, it is nonetheless a significant part of the reform process and one that Legal Spy welcomes.

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