Civil Procedure Rules and the Dilapidations Protocol

The idea of making a 'formal' offer to settle in the context of a dispute, whether it be in traditional litigation or an arbitration etc, was not new to the CPR; many practitioners will recall and may still make Calderbank offers. These were offers made without prejudice but on the specific basis that they would be drawn to the attention of the court when it came to considering the question of costs. The theory (and practise) was that if an offer was made and not accepted, yet in due course the court made a determination that meant that the offer appeared more attractive, the party not taking up the offer would be subject to the sanction of an adverse costs order because, although it might have won something in the litigation, it would not have done as well as the offer. In effect, the court would conclude that the offer should have been accepted and, had it been, the further costs of the litigation could have been avoided.

Part 36 CPR sets out a procedure by which an offer to settle can be made on the basis that it is without prejudice except as to costs and will not be communicated to the judge until the case has been decided and comes to considering liability for costs (that is, akin to the Calderbank principles). See also Part 36 offers in Dialogue and disputes.

Part 36 offers can be made at any time, including before the commencement of proceedings.

Recognising that it is claimants who bring claims, Part 36 CPR introduced significant benefits to claimants who made offers to settle, those benefits relating to improved interest and costs recovery. The purpose of introducing those benefits was to motivate claimants to look carefully at their claims and to try to resolve them where possible. That could have the collateral benefit of reducing the number of claims that then had to be tried and, ultimately, in theory, making the civil justice regime more efficient as a whole.

In the context of dilapidations claims, the sensible surveyor will be considering with his client whether offers to settle should be made at any particular point and in relation to all or part of a dilapidations claim. The timing of making such an offer is crucial and should be considered extremely carefully. If an offer is to be made, given that there are procedural requirements for making an effective Part 36 offer, generally it should be made by the client’s solicitor.