A defendant who wishes to make a Part 36 payment must file at court a Part 36 payment notice (r 36.6(2)) and the payment. Payment should usually be made by cheque and there are different formalities depending on whether the money is paid in to the county court/district registry or to the Royal Courts of Justice (See PD 36, para 4.1 for details). Form N242A may be used for the Part 36 payment notice, but it is not a prescribed form. However, in order to be a valid Part 36 payment notice, the notice must comply with the following requirements. It must: • state the amount of the payment (r 36.6(2)(a)); • state that it is a Part 36 payment (PD 36, para 5.1(1)); • be signed by the offeror or his legal representative (PD 36, para 5.1(2)). If
the Part 36 payment is made by a company or other corporation, in accordance with the general scheme under the CPR, a person holding a senior position in the company or corporation may sign on the offeror’s behalf, but that person must state what position he holds (PD 36, para 5.5);
• state whether the payment relates to the whole claim or to part of it or to any issue that arises in it and if so, to which part or issue (r 36.6(2)(b)). Therefore, the defendant can either make a payment which relates to the whole of the claimant’s case or just part of it. However, the defendant must state whether the payment is in whole or part settlement of the claimant’s case and if it is in part settlement, he must specifically identify which issue or issues he is offering to settle;
• state whether it takes into account any counterclaim (r 36.6(2)(c)). If the defendant is making a counterclaim, the claimant would obviously need to know if the defendant is also offering to settle the counterclaim at the same time and whether the amount paid in is only in respect of the claimant’s claim or is the difference between the claimant’s claim and the defendant’s counterclaim. If the defendant did not have to so specify, as a counterclaim is treated as an independent claim in its own right (r 20.3), the claimant may unwittingly accept the sum paid in without realising that this does not bring an end to the dispute, as he still has to defend the defendant’s counterclaim against him;
• if an interim payment has been made, state that the defendant has taken into account the interim payment (r 36.6(2)(d)). If the defendant has already made an interim payment, a claimant would need to know if the sum paid in is a clear sum in addition to the interim payment or if it is a sum which includes the amount already paid by way of interim payment;
• if it is expressed not to be inclusive of interest, give the details relating to interest set out in r 36.22(2), (r 36.6(2)(e)). If the Part 36 payment notice is silent as to interest, the sum offered will be treated as inclusive of all
interest up until the last day it could be accepted without needing the permission of the court (r 36.22(1)). However, if the sum offered is expressed not to include interest, the Part 36 payment notice must state whether interest is offered, and if it is give the amount offered, the rate or rates offered and the period or periods for which it is offered (r 36.22(2));
• provide certain additional information when benefit received by the claimant is recoverable under the Social Security (Recovery of Benefit) Act 1997 (r 36.23). In those cases where a claimant has received certain State benefits covering losses for which a defendant is liable, for example, where a claimant has been unable to work due to a personal injury and has been receiving income support, if the defendant makes a payment into court to settle the action which is accepted by the claimant, the defendant will be liable to repay the benefit received by the claimant to the Secretary of State in accordance with the Social Security (Recovery of Benefits) Act 1997.