Consequences for the defender
There are of course certain circumstances where such offers are almost certainly of immediate value, straightforward cases where only a single issue is in dispute and all relevant material has been disclosed, such as quantum-only cases.
Where liability, causation and contributory negligence are live issues, both pursuers’ agents and defenders will be in the same position of trying to second-guess their opponent’s attitude to risk. If there are multiple disputes, there are multiple risks. When a pursuer lodges an offer, defenders will of course gain the advantage of seeing exactly where a pursuer stands; but where a pursuer chooses to stand is the key question.
Accept offer - If the offer is accepted by the defender within a “reasonable period” then decree (judgement) will pass against the defender in the sum offered together with a finding of expenses (costs). The pursuer’s offer will have no additional financial consequences for the defender in this situation.
Late acceptance - there is no set time within which an offer may be for accepted (although it will not be possible to accept an offer once the court or jury has retired to consider its decision) but the new rules do provide that a defender who accepts an offer after the reasonable period for consideration of the offer has passed will be liable to make additional payments to the pursuer. The later the offer is accepted the greater the penalty is likely to be.
Offer not accepted – additional payment - a defender may choose not to accept a pursuer’s offer. If the pursuer is subsequently successful at proof (trial) and the court awards the pursuer a sum of money equal to or more than the pursuer's offer, then the defender will become liable to pay an additional amount to the pursuer on top of expenses awarded by the court. The amount that a defender will have to pay will be a sum equivalent to 50% of the pursuer’s expenses attributable to the period from the date on which the offer could reasonably have been accepted until decree.
Strategy – an accurate valuation at the outset of the claim is more important than ever. It will be key to have system in place to flag when these offers are received and deal with them as quickly as possible especially if it looks like it may be accepted. Quick instructions and turnaround will be key. It is important to note that there is no prerequisite for the pursuer to exhibit vouching before they lodge an offer. However, the rules are drafted in such a way as to allow a defender to argue that the additional uplift in the pursuer’s expenses should not apply on cause shown. Arguably the lack of vouching would be argued as cause shown.
For more information, please contact Caroline Coyle Senior associate +44 141 228 8132
This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.