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Hacking Part 36 offers by waiting a day after the relevant period, accepting the offer, and then disputing costs: Pallett v MGN Ltd [2021] EWHC 76 (CH) - Paul Erdunast, Temple Garden Chambers

25/02/21.If Part 36 offeree has a good argument as to why it should not pay the costs of a certain period, then Part 36 seemingly has what computer experts might call a “hack” or “exploit” in its rules to allow such costs to be disputed.

This happened in Pallett v MGN. The judge accepted the legitimacy of the Defendant’s tactics. On its facts, he did not accept the underlying argument as to why the Defendant should not pay the costs of a period in the litigation when they alleged that the Claimant had not properly engaged in alternative dispute resolution. However, this makes no difference to the important point in this case.

Relevant facts

On 20 October 2020 the Claimant made a Part 36 offer, with the relevant period for acceptance being the usual 21 days. On the 22nd day, the Defendant accepted it. The timing was deliberate. The Defendant accepted the offer on the basis that it would put to a judge that it should not bear the costs of a period in which it was said that the Claimant had seriously failed to engage with the settlement process.

Relevant provisions of CPR Part 36

CPR 36.13(1) provides that where an offer is...

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