New NEC3 option clause on project bank accounts
The NEC suite of contracts has been selected to deliver the London Olympic projects - One of the reasons for this is its emphasis on trust and collaboration. In the same spirit a new NEC document allows users to introduce fair payment practices such as project bank accounts, as recommended in a guide produced by the Office of Government Commerce (OGC). The Olympic Delivery Authority has previously indicated that project bank accounts may be used where appropriate. Read more.
Offers to settle - part 36
As of 6 April 2007, the court rules regarding offers to settle disputes changed very significantly. CPR Part 36 sets out specific cost consequences for a party that rejects a settlement offer made by its opponent and then fails to achieve a result equal than or better than that offer at trial. The principal change to part 36 was that a defendant was no longer required to make payment into court if it was to make an offer to settle a monetary claim. Both claimants and defendants can now obtain costs protection by making a written offer of settlement in the form of a Part 36 offer.
However, although Part 36 seeks to impose some degree of certainty as to costs, costs are ultimately in the discretion of the court. It is clear from the decision in Cava v BAA plc that the court can undertake a wide ranging review of all the facts and circumstances of the case in deciding whether the judgment was worth the fight and which party should get its costs. In this case, the claimant beat the offer by the sum of £51. Part 36.14 provides that where a claimant fails to obtain judgment more advantageous than a defendant's Part 36 offer, the defendant is entitled to its costs to the date of the relevant period expired plus interest on those costs, unless the Court considers it unjust.
However, the Court of Appeal held that the new wording introduced a change of practice and the term "more advantageous" permitted a more wide ranging review of all the facts and circumstances of the case in deciding whether the judgment was worth the fight. Here, the additional £51 gained by the claimant was more than off-set by the irrecoverable costs incurred in continuing to contest the case. The court considered that the stress of the litigation should be taken into account and that no reasonable litigant would have embarked upon the trial for only £51. So, if judgement and the offer are at all close then given this judgment, a challenge regarding the costs consequences of Part 36.14 may well follow.
For more information please contact Julia Strettell