“As is common with entirely innocent people, they are offering me an enormous sum of money to keep this matter out of court”

Hugh Grant

Hugh Grant, the actor, has been forced to settle his privacy claim against The Sun newspaper after receiving a Part 36 offer.

Grant was in the midst of legal action against The Sun claiming that journalists tapped his phone, broke into his home and illegally tracked his car to obtain private information (including the name of his child, whose mother gave birth using a fake name). 

What is a Part 36 offer?

A “Part 36 offer”, is a particular type of offer that can carry potential (and in this case, severe) cost consequences if it is rejected. The offer can be made at anytime during proceedings, including pre-action. It is a tool used by parties in litigation to put pressure on the other side to settle a case.

At the same time, it protects the offering party by securing its costs should the recipient reject it and receive a less favourable award at trial.

The offer must:

• Be in writing;
• Stipulate that it is a Part 36 offer;
• Specify the relevant period for acceptance (usually 21 days);
• State the scope and extent of the offer; and
• State whether a counterclaim is taken into account in the offer.

What are the cost consequences?

Notably, the legal fees of The Sun would not have been payable at trial if Grant received a (financially) better result at court than the Part 36 offer provided. In a nutshell, the cost consequences of a Part 36 offer are as follows:

Had Grant rejected The Sun’s Part 36 offer, been successful at court and gained a more advantageous judgment than The Sun’s offer, costs would have been decided by the court in the normal way (i.e. the general rule being that unsuccessful party should pay the successful party’s costs).

However, if Grant had rejected The Sun’s Part 36 offer, been successful at court but failed to receive a judgment that is more advantageous than The Sun’s Part 36 offer (i.e. Grant would have been financially better off had he accepted the offer) he would have been required to pay The Sun’s legal fees plus interest.

Of course, if Grant rejected The Sun’s Part 36 offer and been unsuccessful at court he would have been required to pay the sun’s legal fees plus interest, as above.

Therefore, even if Grant was successful in the claim, there was still a real risk that he would have been required to pay the potentially crippling legal fees of the Sun (which were reportedly almost £10 million).

Next Steps for Grant

Grant brought the claim to highlight the issues of unethical journalism claiming in his witness statement that:

“I have invested a great deal of time in my campaign work for a better and ethical press … the defendant clearly considers itself above the law and is using the law now in a way I believe it was never intended, that is to further cover up and conceal what it has done. 

I strongly believe that cannot be allowed to happen and that what it has done must be brought to light.”

Unfortunately, Grant has been forced to abandon his claim and his efforts to prove his allegations.

However, all is not lost. Grant has confirmed that the money he receives as a result of the settlement will be “repurposed” for groups such as Hacked Off, a campaign for a free and accountable press.

The settlement demonstrates the tactical advantage of a party making a Part 36 offer in litigation and highlights the importance for parties to take sage legal advice when considering the very real risk of adverse costs – even if they have good prospects of success.

Griffin Law is a dispute resolution firm comprising innovative, proactive, tenacious and commercially-minded lawyers. We pride ourselves on our close client relationships, which are uniquely enhanced by our transparent fee guarantee and a commitment to share the risks of litigation.  For more details of our services please email justice@griffin.law or call 01732 52 59 23.