In French v Groupama Insurance Company Ltd (Groupama) [2011] EWCA Civ 1119, the Court of Appeal found that a settlement offer made in a letter from Groupama to French dated 15 February 2007 did not comply with either the previous or current requirements of CPR Part 36 (a procedure allowing parties to make settlement offers which if not accepted have certain costs consequences should the principal sum awarded by the Court be higher or lower than the sum offered). This meant that, despite French being awarded a principal sum less than that offered by Groupama, the costs consequences of CPR Part 36 did not apply. Instead, the Court of Appeal applied its discretion under the general rules about costs in CPR Part 44 and ordered that the fair result would be that French was entitled to her costs up until Groupama’s offer had expired.

This case shows that, if parties intend the costs consequences of CPR Part 36 to apply, they should ensure that they comply with its requirements as otherwise the Court will revert to its general discretion under CPR Part 44.