Yieldpoint Stable Value Fund, LP v Kimura Commodity Trade Finance Fund Limited
Case background
In the recent case of Yieldpoint Stable Value Fund, LP v Kimura Commodity Trade Finance Fund Ltd [2023] EWHC 1512. it was shown that a very high Part 36 offer may be deprived of the benefits available to a party who beats their own offer, where it is considered that the offer was not a genuine attempt to settle the proceedings.
Part 36 of the Civil Procedure Rules is designed to support and assist all parties to come to a settlement of the claim outside of Court. Either party can make an offer to settle the claim. If the offer is accepted, the claim is resolved, subject to costs. If the offer is rejected, the parties continue to trial.
Any offer made under Part 36.16 is without prejudice, save as to costs. The Court will only become aware of a Part 36 offer when the issue of costs falls to be considered.
Where a party obtains a judgment that is as a minimum as advantageous as its Part 36 offer, the Court must unless it considers it is unjust to do so order that the party is entitled to certain enhancement as set out in Part 36.17(4)
Considerations when making a Part 36 offer should include:
- That the level of the offer is justified by the strength of the claim at the time of the offer.
- If a high offer is made it can be justified that the claim is considered to be objectively, very strong.
- That the offer is not a cynical attempt to manipulate the Part 36 regime and apply pressure on the opposition.
- That the offer is a constructive offer of settlement which is considered will genuinely have a consequential impact on the chances of avoiding a trial.
- A marked gap between the amount of the offer and the perception of the strength of the case might suggest that it is not a genuine attempt at settlement.
- To remember that the burden is on the offeree to persuade the Court that it would be unjust to award the Part 36 enhancements which is not an easy task.
Comment
In this case, the judge was satisfied that, when analysed on its facts, the Part 36 offer was not a genuine attempt to settle.
However, it was emphasised that this judgement should not discourage parties from making Part 36 offers, but conversely encourage them to make offers at a considered level and such offers are encouraged in the interests of reaching a settlement.
If you are a party threatened with litigation proceedings, we would be happy to discuss your circumstances and assist you in the matter.
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Lesley Harrison is an Associate in our expert Dispute Resolution team.
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