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The dangers of not accepting a Part 36 offer

The timing and content of a Part 36 offer will often form a crucial step in settlement discussions. A Part 36 offer will, even if not accepted, protect to some extent the offeror’s position on costs.  It will also force the recipient of the offer to focus their mind on settlement.

The recent decision of Edwards-Stuart J in the Technology and Construction Court in Jockey Club Racecourse Ltd v Willmott Dixon Construction Ltd[2016] EWHC 167 (TCC) provides a good illustration of the dangers of failing to accept a Part 36 offer.  More interestingly, the judgment confirmed that it was not necessary for a valid Part 36 offer to reflect an outcome that would be possible at trial. The decision dealt with a number of other issues, but this article will focus on the effect of the decision in relation to the commercial considerations parties face when presented with a well-timed Part 36 offer.

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