Property Litigation Partner Kevin Morgan is a think outside the box kind of lawyer. Here he is, with a suggestion: make creative Part 36 offers in property disputes.

A lot of Judges have little patience for property disputes, particularly between neighbours. What really lies behind the dispute? Why can’t you just sort it out between yourselves and not bother the Court? Mediation, alternative dispute resolution or just making good old fashioned offers is crucial to settling these disputes early, and avoiding judicial wrath.

PLAYING BY THE RULES

First things first: what is a Part 36 offer? Put simply, it’s a way to show the Court that you’re making steps towards settling the dispute. Be the bigger person – and get rewarded for it. It’s a powerful tool to steer the other side towards settling. If they turn your offer down, and then the Court’s final order is a worse outcome for them than your offer, they will face some costly consequences. For your efforts, you will receive more costs and maybe even interest on your damages. These ‘rewards’ depend on the exact circumstances.

Anything can be offered in a Part 36, but it must play by the rules. In writing, it must specify which parts of the case it settles (usually all of it), have a primary acceptance window of 21 days, and include costs. You can find all the regulations in Part 36 of the Civil Procedure Rules.

WHAT KINDS OF OFFERS?

Think outside the box. Your offer can be really specific to your situation, a world away from the Court’s limited range of orders. There are some solutions that a Court can’t order but that help both parties to regulate the use of their adjoining land…

Are you tearing your hair out over a disputed right of way? You could agree to sell the land instead of argue over it. The Court can’t order that but it could easily work for both parties. Are you wasting time and energy over a parking dispute? If so, maybe there’s a specific use of the land you could be happy with. What about offering to accept a certain size or type of vehicle, time of day, or number of cars to park there?

All sorts of things pop up as settlement terms, especially in neighbour disputes. The most bizarre example I’ve come across is a term that an unflattering effigy of the Claimant was allowed to stay on the Defendant’s land!

THE TRICKY PART

The challenge of a Part 36 offer is also its greatest strength. Often the best solution to a property dispute is unique, and nothing like a typical court order. So if you do reach Court it can be hard to compare and contrast. How do you prove that your creative offer was better than the actual outcome? Is it a worthwhile approach?

The short answer is yes, as long as they are used wisely, and in the right circumstances. Courts are receptive to the argument. Let’s look at a recent case. In Jockey Club Racecourse v Willmott Dixon Construction [2016] EWHC 167 (TCC) the issue before the Court was damage done to the roof of a new grandstand building. It was an ‘all or nothing case’ – the Defendant was going to either be found 100% at fault or not all. The Claimant offered a Part 36 to make the Defendant 95% liable, but the Defendant refused to accept this offer. At trial the Defendant was found 100% liable. The Claimant argued that they had beaten their Part 36 offer, and so could get the Part 36 rewards on offer. The Court decided that their offer was a genuine attempt to settle and validated the claim.

SO WHAT?

Don’t be afraid to make Part 36 offers within creative settlement terms. Even if they are outside what a Court might order, the Court can still take them into account. The trick is to prove that you’ve beaten your offer by comparing what was on offer with the final order. If so, you can happily reap your Part 36 rewards.