Although a monetary claim was the paradigm contemplated by CPR Pt 36, Part 36 was not confined to that. Rule 36.2(2)(c) did not mandate that the claimant had to seek costs and make payment of them a condition of his offer. The substance of the claim, and which of the parties was seeking to establish liability and which to oppose it, was one of the circumstances to be considered by the court in determining whether it would be unjust to make orders for indemnity costs and interest on costs for the purposes of rule 36.14(3).

Hildyard J so held in the Chancery Division on a claim by the claimant, The Procter & Gamble Co, against the defendants, Svenska Cellulosa Aktiebolaget SCA and SCA Hygiene Products Manchester Ltd. The claim was not to recover any money or money’s worth from the defendant but to eliminate or to reduce the amounts which the defendants claimed to be entitled to recover from it. The claimant had made an offer to settle, expressed to be under CPR Pt 36, but as part of that offer had agreed to be liable for the defendants’ costs up to the date of notice of acceptance. The offer to settle had been rejected by the defendants.

CPR 36.2(2) provides: “A Part 36 offer must— (c) specify a period of not less than 21 days within which the defendant will be liable for the claimant’s costs in accordance with CPR 36.10 if the offer is accepted.”

CPR 36.14(3) provides: “where r 36.14(1)(b) applies, the court will, unless it considers it unjust to do so, order that the claimant is entitled to (a) interest on the whole or part of any sum of money (excluding interest) awarded at a rate not exceeding 10% above base rate for some or all of the period starting with the date on which the relevant period expired; (b) his costs on the indemnity basis from the date on which the relevant period expired; and (c) interest on those costs at a rate not exceeding 10% above base rate.”

HILDYARD J said that although plainly a monetary claim was the paradigm contemplated by CPR rule 36.2, Part 36 was not confined to that: and, for example, rule 36.14(1A) contemplated claims other than money claims. It was not impossible for a claimant to comply with Part 36 unless he required to be paid his costs and such payment to be made within a period of not less than 21 days. Such a strict construction would tend to undermine a central objective of Part 36, identified by Davis LJ in F & C Alternative Investments (Holdings) Ltd v Barthelemy [2012] EWCA Civ 843 as being to encourage claimants to make sensible offers and to provide an inducement to defendants to accept them lest otherwise they be exposed to the consequences provided. That objective would be advanced, not undermined, by reading CPR 36.2(2)(c) as requiring a claimant who sought his costs to specify a period of not less than 21 days within which the defendant would be liable to pay them, but not as mandating that the claimant had to seek costs and make payment of them a condition of his offer. Accordingly, the claimant's offer was to be treated as compliant with Part 36, as it had been expressed and intended to be. The offer was therefore effective to open the gateway to rule 36.14, and in particular the consequences that rule 36.14(1)(b)(3) prescribed. It was neither required nor permissible to go behind the formal status of the parties for the purposes of determining whether there had been compliance with Part 36 and the prima facie effect of a compliant offer: for those purposes the description in the record was conclusive. However, the substance of the claim, and which of the parties was seeking to establish liability and which to oppose it, was one of the circumstances to be considered by the court in determining whether it would be unjust to make orders for indemnity costs and interest on costs for the purposes of rule 36.14(3). In the present case, there was force in the argument that in substance the claimant was really in the position of a defendant. In the context, there might be infused into the question of whether the consequences were “unjust” the question whether they coincided with and advanced the objectives of Part 36 (which included that differential treatment of claimants and defendants). In the particular circumstances of the present case, it was not just to make an order under rule 36.14(3), but the just order was that the defendant bear all the claimant’s costs incurred after the offer on the standard basis.