Pursuer’s Offer; Friend or Foe?

Legislation brought forward on 2 March 2017 amended both the Court of Session and Sheriff Court Rules, inserting into those Rules a formal system of Pursuers’ Offers. For a limited period of time Pursuers’ Offers did form part of the Rules of the Court of Session but these rules were revoked in 1996 and have only now been re-introduced in their current form.

The recent amendment has meant that since 3 April 2017 Pursuers have been able to put forward formal Pursuers’ Offers in any case where the Summons or Initial Writ includes a crave seeking Damages. The Offer, which must be lodged by the Pursuer’s Agents with the Court, must offer the Defender the opportunity to settle the case by accepting the Pursuer’s Offer of a sum or sums of money inclusive of interest to the date of Offer along with the Pursuer’s expenses.

Since their re-introduction we have found Pursuers’ Agents have utilised these new Rules in a number of cases in an effort to bring cases to an early settlement. However, the question for Defender’s Agents is whether or not these new Offers are something of concern or whether they can indeed be of benefit to Defender’s Agents as well.

The Offers work in much the same way as Tenders do. The Pursuer’s Offer should be accepted by the Defender by lodging a Minute of Acceptance of the Pursuer’s Offer in Process. Any Acceptance must be unqualified and in the case of more than one Defender all Defenders must accept the Pursuer’s Offer for the Pursuer’s Offer to be effective.

Prior to their introduction, concerns were raised with regard to the fact that the Rules provide for the Defender to be found liable for payment of an additional uplift in expenses where an Offer is not accepted in a reasonable period, or where a Court award is the same or better than the level of the Pursuer’s Offer. It was viewed as perhaps inequitable that the Defender was not offered the same uplift should the Pursuer fail to beat their Tender at Proof (Trial).

Therefore, whilst Pursuers’ Offers can be used by Agents to increase the pressure on Defenders to settle the case, in our experience the Pursuers’ Offers have also been of benefit to Defenders as they have forced Pursuers in certain cases to be more realistic as to how they value their claims, encouraging Pursuers to put forward reasonable offers, resulting in earlier settlement of some cases than perhaps would have been achieved otherwise.

However, a question remains: how much of an impact will the Rules regarding an uplift in expenses have on Defenders?

As yet, we have found that Pursuers’ Agents, in general, have allowed a reasonable time-frame for acceptance and have not been quick to seek any additional expenses if acceptance takes perhaps a couple of weeks. It is, however, early days for Practitioners utilising these new Rules and we will have to pay attention to how the case law develops, particularly in relation to the rules regarding the expenses uplift.

This post was written by .

Published .

Posted in: Legal Updates