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PART 36: Rating the offer

17 February 2017  

Tom White and Claire Curtis report on the effect of currency fluctuations on Part 36 offers

Part 36 is intended to provide a predictable and self-contained code as to the consequences of compliant offers to settle litigation. However, not all commercial litigation is concerned with pounds sterling, which can lead to complications if there are currency fluctuations between the time of a Part 36 offer and the date of judgment. In Novus Aviation Ltd v Alubaf Arab International Bank BSC(c) [2016], Leggatt J had to consider whether it was just to apply the cost consequences set out in CPR 36.14(3) of the then Civil Procedure Rules (now CPR 36.17(4)) in circumstances where Novus had beaten its Part 36 offer (made in sterling), but there had been a considerable drop in the value of sterling to US dollars (dollars being what really mattered to Novus) between the offer being made and the date of judgment. On the facts, he held that it would be unjust to award Novus what would otherwise be a windfall as a result of the currency fluctuation, and refused to allow Novus the cost benefits of beating a Part 36 offer and ordered costs to be assessed on the standard basis.

Additional Info

  • Case(s) Referenced:

    Barnett & anor v Creggy [2015] EWHC 1316 (Ch)

    Novus Aviation Ltd v Alubaf Arab International Bank BSC(c) [2016] EWHC 1937 (Comm)