How do Part 36 Offers work? Exploring Hugh Grant’s starring role

17th May 2024

Hugh Grant has accepted an “enormous sum of money” to settle his ongoing unlawful information gathering claim against News Group Newspapers (“NGN”), the publisher of The Sun, which included allegations of phone hacking, landline tapping and burglary. The Love Actually star however, has taken to X (formerly Twitter) to publicly denounce that this was a decision taken on merit and rather a choice informed by the legal consequences of a Part 36 offer.

We take a look at how the practical operation of Part 36 has deterred Hugh Grant from pursuing NGN and whether public interest should have been sufficiently compelling for the allegations to have been thoroughly tested in open Court.

The Background to the claim

Hugh Grant is one of several high-profile individuals who has sought to bring claims against NGN in recent years, seeking to fight “…for a free press that does not distort the truth”. He claimed that reporters for The Sun, in an attempt to gain insight into his personal life, had broken into his home in London, placed a tracking device on his car and intercepted his voicemail messages. NGN have consistently denied these allegations.

NGN successfully argued in May 2023 that Hugh Grant should be statute-barred from bringing the phone hacking aspect of his claim against The Sun. NGN fell short however, in respect of the other allegations which the Judge ruled could still be heard, as Hugh Grant did not have sufficient knowledge of these allegations prior to the expiry of the limitation period. The remainder of the claims were set to go to trial in early 2025, until the most recent development which can only be presumed to have been a settlement offer made pursuant to Part 36 based on the comments made by the Notting Hill star himself.

What is a Part 36 Offer?

A Part 36 offer is tactical settlement offer which can be made at any time in proceedings, by either the Defendant or the Claimant, and are designed to incentivise parties to discuss matters more openly and thus reach a settlement, avoiding the need for a lengthy and costly trial. Part 36 offers are treated as without prejudice save as to costs, meaning that their existence cannot be referred to in court as evidence of an admission of liability of the party who presented the offer.

The tricky consideration for Hugh Grant, however, is that Part 36 offers don’t come without a catch – the cost consequences for a Claimant of accepting, or more importantly here, not accepting an offer can be financially detrimental. For a Part 36 offer to be legally binding and for these cost consequences to kick in, the offer must comply with the following criteria pursuant to Part 36 of the Civil Procedure Rules (“CPR”):

  • Be made in writing;
  • Made clear that the offer is made pursuant to Part 36;
  • If made 21 days or more before the start of trial, it must specify a relevant period (of not less than 21 days) within which the Defendant will be liable for the Claimant’s costs; and
  • State whether the offer is to settle the whole or part of the claim, and if it takes any counterclaim into account.[1]

The potential cost implications which Hugh Grant had to weigh up

An offer made in accordance with the criteria set out in the CPR, which is not accepted by the receiving party, will result in cost and interest implications following judgment – the exact nature of these consequences depends upon which party made the offer, the value of said offer and the subsequent judgment.

In its most simplest form however, Hugh Grant neatly sums up the potential implications he was facing when he said “…the rules around civil litigation mean that if I proceed to trial and the court awards me damages that are even a penny less than the settlement offer, I would have to pay the legal costs of both sides”. Whilst the value of the offer is undisclosed, if Hugh Grant went on to succeed at trial but the Judge awarded him damages of a lesser amount, the notion that he would be penalised for doing so as he arguably should have accepted the offer and not gone to trial, is correct.

In this hypothetical scenario, despite Hugh Grant being the ‘winner’, the Judge would likely order a split costs order, meaning that he would only be awarded his costs up to the expiry of the aforementioned relevant period. Contrary to the usual rule, Hugh Grant would then be ordered to pay NGN’s legal costs with interest, from day 22 onwards, despite being the successful party, on the basis that he would have failed to obtain a judgment which was more advantageous than NGN’s offer. Hugh Grant’s lawyers would have advised him of this potential risk, and it is evident that this additional financial penalty heavily influenced his seemingly reluctant decision to accept NGN’s settlement offer.

Hugh Grant’s decision

Hugh Grant has made it no secret that he is not motivated by the potential damages he would receive if he was to succeed with his claim and has been extremely vocal about his desire for the behaviour of NGN to not go unpunished, stating “I don’t want to accept this money or settle. I would love to see all the allegations that they deny tested in court.” Nonetheless, he commented that given the above potential cost implications, he was “…shying at that fence”. The costs of Rupert Murdoch’s lawyers, owner of News Corporation, are in the region of £10 million according to Hugh Grant, something which even he, understandably, did not want to become liable for.

Whilst the exact amount of the offer remains undisclosed, the decision taken by him would seem to imply that the amount was presented at such a level so as to ensure that there was no commercial alternative. For the avoidance of doubt, the settlement offer is made without an admission of liability on the part of NGN, making it even more of a blow for long-term media regulation activist Hugh Grant. In his thread of posts on X, he subsequently confirmed that the settlement monies will be repurposed into campaigns such as Hacked Off, which seek to, in his words, “…expose the worst excesses of our oligarch-owned press”.

Is the public interest a sufficient reason to override the legal consequences of Part 36?

Whilst Part 36 offers normally form the subject of strategic positioning discussions that take place between legal advisers and their clients behind closed doors, Hugh Grant’s involvement has brought Part 36 offers into the spotlight. To a non-legally trained eye, the application of Part 36 may be seen to inhibit access to justice if even a high-net-worth individual such as Hugh Grant cannot pursue what he considers to be an injustice.

Technically speaking however, Hugh Grant has not been stopped from having his day in Court, but rather the cost consequences of doing so, as a direct result of NGN’s Part 36 offer, were sufficiently prohibitive for him to settle. It is arguable therefore that this shows Part 36 offers working in the way the legal system intended them to, by encouraging parties to settle and avoiding the unnecessary time and expense of going to court, and celebrities are no exception to the rule. In a statement issued by NGN, this point was emphasised – “…it is in both parties’ financial interests not to progress to a costly trial.”

There is a counter argument which we have seen arise in these circumstances though, namely that allegations of such a nature should be tested in Court and the evidence brought into the public domain. This is especially apparent for those who consider that NGN have misused the application of Part 36, and consequently the legal system is inadvertently enabling parties with ‘deep pockets’ to effectively force the other party’s hand by offering a sum which they cannot, commercially or financially, refuse.

There is no denying that Hugh Grant, will feel shortchanged by this outcome and the inability to have the evidence tested in Court. However, given how Part 36 operates and that the costs consequences which follow are automatic (i.e. there is no judicial discretion to deviate from them if the rules have been followed), any Claimant in a similar position to Hugh Grant would have had to think very carefully before continuing with proceedings, whether their case was being brought in the public interest or not.

Please note that the application of Part 36 and its cost consequences in practice can be far more complex and nuanced than the examples given in this article, so we would recommend seeking appropriate advice before taking any related action. Please do contact one of our team of experts if we can assist.


[1] We have set out here the obligations which apply to an offer being made by a Defendant. However, Claimants can also make Part 36 offers albeit the costs consequences for a Defendant are different.

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