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to 43]
What are referred to in England and Wales as "Part 36 offers and payments" are
referred to in the Final Report as "sanctioned offers and payments". They involve a
procedure for one party to make offers or payments into court to settle a dispute. If
the other party does not accept, he runs the risk of costs and interest sanctions if he
subsequently fails at the trial to better what was offered, even if he wins the action. It
is a procedure which aims to encourage the parties to take possible settlement
seriously and to avoid unproductive prolongation of the litigation.
Part 36 offers have proved a great success in England and Wales and the proposal for
their introduction in Hong Kong received widespread support. The Working Party
recommends their adoption, together with relevant ancillary provisions, suitably
adapted for operation in Hong Kong. In particular, it is recommended that in Hong
Kong :-
(a)
the provisions relating to sanctioned offers and payments should not apply to
offers made before commencement of proceedings unless an applicable pre-
action protocol adopted in a relevant specialist list prescribes otherwise;
(b)
given the general absence of pre-action protocols, a sanctioned offer or payment
should remain open for acceptance for 28 days after it is made unless the court's
leave is obtained to withdraw it sooner; and,
(c)
the rules should make it clear that the court will continue to exercise its
discretion as to costs in relation to any offers of settlement which do not qualify
as sanctioned offers.
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