Confusion over implementation date of new Part 36 rule

The new Part 36 rule ‘will come into force on February 12’, six weeks before the rest of the Jackson reforms, according to a draft statutory instrument published by the MoJ.

Under the Offers to Settle in Civil Proceedings Order 2013, defendants who fail to beat Part 36 offers must pay claimants an additional payment of up to 10 per cent of the damages awarded, together with any penalties imposed under other rules.

A spokeswoman for the MoJ said the order would come into force on 12 February 2013 “to enable associated amendments to be made to the civil procedure rules in time for implementation in April 2013”.

However, David Marshall, managing partner of Anthony Gold and a leading expert on civil litigation, said: “It is very confusing that it appears that this is intended to be in force before the other reforms in April.”

He questioned whether the change could take effect before LASPO was implemented and said he “could not see any reason for anything to come into force” before 1 April.

Under the order, where the claim is only for money only, and the court awards damages of up to £500,000, defendants must pay an additional 10 per cent uplift. Where damages are between £500,000 and £1m, defendants will pay 10 per cent on the first £500,000 and five per cent on the rest.

For non-money claims, defendants will be required to pay an additional ten per cent of the costs.

Where costs exceed £500,000 they will pay ten per cent of the first £500,000 and five per cent of any costs ordered above that figure. All payments are subject to a cap of £75,000.

Marshall said his main concern was that the final drafts of the new civil procedure rules had still not been published.

“There is a potential for negligence claims if solicitors do not consider how the transitional provisions apply to current and future cases,” he said.

“People will have to think very quickly and act very fast.”

Three other draft statutory instruments published by the MoJ bringing into force the Jackson reforms are all dated 1 April 2013.

Regulations relating to clinical negligence proceedings allow successful claimants to recover insurance premiums to the extent that they relate to expert reports.

The reports must relate to liability and causation and must actually have been obtained.

The Damages-Based Agreements Regulations 2013 set out the new caps on contingency fees – 25 per cent of damages for personal injury cases, 35 per cent in employment cases, and 50 per cent for all other claims.

The Conditional Fee Agreements Order 2013 limits the cap on success fees, as a proportion of damages, solicitors can charge in personal injury cases to 25 per cent of damages.

In both cases, contingency fees and conditional fees, the caps only apply to hearings at first instance. In the case of appeals, no caps apply and 100 per cent of the damages can be taken in success fees.