Synopsis
When considering the application of Part 36 the Court considered a Consent Order to be tantamount to Judgement as far as the wording of CPR 36.17, allowing the party who made such an offer to enjoy Part 36 benefits when concluding via Consent Order.
Background
The Claimant in this matter alleged that he had been wrongfully detained in early 2020. Proceedings were issued for losses and during a hearing on 22 November 2024, it was found that the Claimant had been unlawfully detained, resolving the liability element of the claim and leaving only quantum to be resolved.
Prior to the liability hearing, the Claimant made a Part 36 offer in the sum of £15,000. This offer was not accepted by the Defendant and the mater proceeded towards the final hearing. However, prior to the hearing on 28 July 2025, quantum had been agreed between the parties in the sum of £16,000, with submissions to be heard in relation to costs. Overall, the Claimant achieved a better result than 4 different Part 36 offers made over the course of litigation.
During submissions, the parties identified the key issue being whether CPR 36.17 applies.
The application of CPR 36.17
CPR 36.17 reads as follows:
36.17
(1) Subject to rule 36.24, this rule applies where upon judgment being entered—
(a) a claimant fails to obtain a judgment more advantageous than a defendant’s Part 36 offer; or
(b) judgment against the defendant is at least as advantageous to the claimant as the proposals contained in a claimant’s Part 36 offer.
The Defendant argued that there must be a ‘Judgement’ before the application of this comes into play. Reliance was placed on the wording of CPR 36.17, which expressly states that it applies to judgements throughout. It was argued that judgements related to an independent decision by a judge following a contested hearing. It is not intended to relate to settlement, even when settlement has been approved by a judge. The Defendant stated that their position is that a judgement must be entered by the Court on the damages due to a Claimant before CPR 36.17 has any application.
The Claimant disagreed, stating that an agreed settlement submitted via a Consent Order that is subsequently sealed equates to the entry of judgement. The Claimant argued that the difference between a Judgement and a Consent Order is purely semantic and a Consent Order should be treated as a Judgement in relation to CPR 36.17. Reliance was placed on the matter of Vanden Recycling Ltd v Kras Recycling BV [2017] EWCA Civ 354, where a Consent Order requirement payment in final settlement can have the same effect as a judgement for purposes of rules which operate on the basis of a ‘judgement’.
The Court’s application
The Court considered the position of both parties, but found the use of precedent within the Court of Appeal and drew on that reasoning for the circumstances of this claim. The Court considered the absence of the work ‘Judgement’ to be immaterial, with the key issue being the operative effect of the Order. The Court also found that the White Book used the terms ‘Judgement’ and ‘order’ interchangeably, in ways that did not provide for a rigid distinction between the two.
Applying this to the facts of the current claim, the Court found that the Consent Order enforced judgement for the claimant and was enforceable in the same way as a judgement following trial. The Court also considered that no arguments were made as to the Part 36 consequences being unjust. The Court ordered that the Claimant would be entitled to the Part 36 benefits, and was also awarded costs of the application.
Analysis
This matter demonstrates how a potential loophole regarding Part 36 offers has been closed off by the Court. In the event a previous Part 36 offer poses a risk, Defendants are unable to simply agree to more favourable terms via a Consent Order to avoid the Part 36 consequences. It further demonstrates the strength of a reasonably pitched Part 36 offer in proceedings can be, as the Court seem very reluctant to go behind the costs protection it affords the party making such an offer.
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