Legal expenses cover where there has been a reasonable offer to settle

[InTheRoseGarden]

I have a legal dispute with a person whose legal expenses are being covered by their home insurance.

If I make a reasonable offer to settle the dispute, will the insurer cease to cover any further legal expenses or will they just cover all expenses forever as long as the relevant solicitor thinks the person would win in court?

(I'd like to settle but the relevant person has made completely unreasonable demands. I know they'll only continue as long as their costs are covered and I'm hoping they would be forced to accept a reasonable offer).

In a nutshell, if you make a costs protective offer (a Part 36 offer) then the insurer is unlikely to continue to fund the claim if the solicitor advises that the offer ought to be accepted (usually if it’s a reasonable sum when taking into account the litigation risks). Do you have legal representation?

Thank you so much Anita that’s incredibly helpful. That’s exactly what I hoped for. I’ll look into Part 36 offers. No legal representation sadly but I have had some legal advice on the subject matter of the dispute.

Would a reasonable “without prejudice” offer have the same effect or does it need to be a Part 36 offer? It’s a low value dispute. I would be loathe to pay their legal costs to date which seems to be part of the deal for a Part 36 offer.

You can make a Calderbank offer which can specify whatever costs terms you like, but it doesn’t carry the same weight as a P36 offer in terms of costs risk to the claimant if s/he wins at trial so less incentive to settle.

Also, if the C has insurance and has legal representation, an offer which doesn’t include costs won’t be that tempting (unless the claim is very weak) as C will probably end up paying the damages to the LEI so they may feel better to press on as they will get damages and costs if they win at trial. Although the depth of your pockets will be another consideration, there’s no point in obtaining judgment against an impecunious defendant who can’t afford to pay it, you’re better settling for what you can get.

Actually how ‘low value’ is it? If it’s a small claim, costs aren’t recoverable so P36 has no application and you can just make a without prejudice offer to settle. Suspect the insurer would take the same stance if solicitor advised reasonable to accept.

I'm pretty confident it is small claims territory. It's a boundary dispute over a short and narrow strip of land.

I'll plump for a reasonable without prejudice offer to settle and hope that the LEI pulls the plug on them!

Thank you so so much.

If it’s a land dispute do they just want money. Part 36 offers can only be in respect of money settlements. If they want land etc, agreements then you would have to make an offer “without prejudice save as to Costs” (that just means the court only finds out about it after any hearing when dealing with costs)

If you google Part 36 Civil procedure rules, these set out in detail what information a part 36 offer should contain to be valid.

Thank you Busybeez123

The offer they've put on the table lists everything imaginable except money so that's a good point!