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11.1
Consultation response and recommendation
The innovations introduced by CPR 36 were described in some detail in the Interim
Report.
In this Final Report, we will refer to Part 36 offers and payments proposed
for Hong Kong as "sanctioned offers" and "sanctioned payments", that is, offers of
settlement and payments into court sanctioned by the Rules as qualifying for specified
legal consequences.
The proposed sanctioned offers and payments aim to encourage the parties to take
possible settlement seriously and to avoid unproductive prolongation of the litigation.
A plaintiff who rejects a sanctioned offer or payment and then fails to achieve a better
result at the trial may, despite winning the case, be ordered to pay all of the
defendant's costs incurred after the time when the plaintiff could have accepted the
offer. This substantially mirrors the rules already in place under Order 22 of the RHC.
The major change brought about by CPR 36 involves rules providing that a defendant
who rejects a plaintiff's sanctioned offer and then finds that the plaintiff does better at
the trial, may be ordered to pay indemnity costs and additional interest at up to base
rate plus 10% on the sum awarded.
The response elicited in the consultation on this Proposal was enthusiastic. All the
respondents who addressed it were in principle in favour of adopting Part 36 in Hong
Kong. Some suggested going further, for instance, by making the plaintiff pay
indemnity costs to the defendant where he unwisely rejects the defendant's offer,
or
by extending the scheme to pre-Writ offers.
Some injected a note of caution: one
solicitors' firm and the LAD cautioned against possible abuses of the scheme by
defendants, while two other firms warned against the pendulum swinging too far in
favour of plaintiffs.
Notes
A set of barristers' chambers.
The BSCPI. CPR 36.10 allows the court to take into account pre-commencement offers which
comply with Part 36 requirements.
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