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What is a Part 36 offer? A lesson from Hugh Grant.

British actor Hugh Grant recently made headlines not for his on-screen performances, but for his privacy case against the Sun newspaper.

Although Hugh fancied his chances in Court, he walked away from the matter and settled the claim for an ‘enormous’ amount – but why? Hugh took to X (formerly Twitter) to explain, but we thought we’d go into a little more detail.

The Sun denied Hugh’s allegations but extended a Part 36 offer to settle the matter, which Hugh was advised to accept.

So, what is a Part 36 offer?

A Part 36 offer is an offer governed by specific Civil Procedure Rules which has implications on costs. An offer made under Part 36 means you agree to pay the settlement figure AND the other party’s legal fees.

So why did Hugh accept the offer if he thought he could win in Court?

Rejecting a Part 36 offer could lead to adverse cost consequences. Even if successful in Court, Hugh would need to secure a higher award than the Part 36 offer to avoid penalties. As the Sun reportedly made a substantial offer, there was a real risk to Hugh that he would not achieve such a good result at Trial.   In the event that the Court awarded Hugh less than that amount the Sun had offered, Hugh may have become liable to pay a good portion of the Sun’s legal costs as well has his own legal fees, potentially up to £10 Million in legal fees – even though he had won the claim.

Hugh’s decision to accept the offer shows the effectiveness of making a strategic Part 36 offer.  

Doesn’t this interfere with justice?

You might argue, particularly in this case, that although a Part 36 offer achieves settlement, it does not achieve justice.

However, there is a logic to the Part 36 rules. They are designed to reward parties that make genuine efforts to resolve disputes without resorting to Court intervention and penalise those who refuse to engage in settlement negotiation. It is the Court’s stance that settlement should be encouraged because the parties do not take up the Court’s resources and incur unnecessary legal costs.  

But what that can mean is that what is ‘fair and just’ is often left behind. As in this case, The Sun have been able to sidestep any accountability, while Hugh has been left with little option but to settle this matter instead of having the allegations tried in Court.

Written by Megan Wood – Trainee Solicitor – Litigation Department.

If you have any questions relating to the above article please do not hesitate to contact us, our team of expert solicitors are on hand to help.

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