“Judge, would you please open up the envelope containing the Part B offers” – When parties properly utilise Part 36 at Stage 3.

I regularly get questioned by Judges about why parties do not appropriately use Stage 2 negotiations to prepare for Stage 3 hearings. It is almost always the case that the first Stage 2 offers are the same as the Part B figures, meaning there has been no tactical approach to either negotiating a settlement or setting up the ground work to get Part 36 benefits.

Last Friday I was for the Defendant at two Stage 3 hearings at Bristol County Court. Both cases had Part 36 consequences, the first being in favour of the Claimant and the second in favour of the Defendant. I did not have the Part B figures in my instructions, however, as always. the Judge would have the Part B of the Court Proceedings Pack in a sealed envelope;.

During the first hearing, I successfully challenged one contested claim and minimized another. However, my opponent requested the Judge to open the envelope, which only occurs when a party has won a favourable Judgment, entitling them to Part 36 benefits. The Claimant had made a substantial reduced offer, and this resulted in the Claimant surpassing its Part B offer despite reasonable reductions in the claims, leading to a significant increase in its damages.

Reminder of the RTA Protocol

7.64  Where the parties do not reach an agreement on

(1) the original damages within the periods specified in paragraphs 7.35 to 7.37; or

(2) the original damages and, where relevant, the additional damages under paragraph 7.51,

the claimant must send to the defendant the Court Proceedings Pack (Part A and Part B) Form which must contain—

(a) in Part A, the final schedule of the claimant’s losses and the defendant’s responses comprising only the figures specified in subparagraphs (1) and (2) above, together with supporting comments and evidence from both parties on any disputed heads of damage; and

(b) in Part B, the final offer and counter offer from the Stage 2 Settlement Pack Form and, where relevant, the offer and any final counter offer made under paragraph 7.53.

Stage 3 hearing – the Claimant beats its Part B

I managed to reduce the Claimant’s total damages to £6,820 (down from £8,650) and in all honesty, I presumed (in the absence of the Part B figures) that the Judgment would fall in between the parties offers.

I should have clicked when my opponent asked the Judge to open the envelope. The Claimant’s Part B offer was £4,360. Unbelievable as it was, the Claimant took advantage of the rules that are there for the Claimant or Defendant to take advantage of.

Obviously, this was still quite a reduction and they probably did not need to reduce their offer so considerably, but the Defendant knew or ought have know that the Claimant would have easily beaten their Part B.

Stage 3 hearing – the Claimant fails to beat the Defendant’s Part B

This case had all heads of loss agreed, save for the cost of storage of a motorcycle for to 132 days, the cost of recovery and a charge for producing an estimate. I knew I would have difficulty in challenging the recovery charge, no issue in challenging the esitmate fee (which was a disbursement, not a special damage) but the real issue was the storage costs.

The Defendant’s position was that it wasn’t their fault that the Claimant couldn’t identify the Defendant’s insurer and pursued a claim against the MIB incorrectly for a long time, incurring significant storage costs in the sum of £3,696 + VAT. The difficulty for the Defendant’s insurer was that the Defendant drove off without giving his details. The MID did not show an insurance policy for the VRN. The offered £2,400 in total for everything, which was about 50% of the total invoice.

However, it was my position that the Claimant had a vital flaw in the claim.

The Claimant, in his witness statement, accepted he could store his motorcycle at home. The reason he put it in storage was because it needed to be inspected and repaired. There was, in my submission, no genuine reason or need to put the motorcycle in storage and the Judge agreed.

The Claimant had failed to beat the Defendant’s Part B by £4,580.20. Not only did it need to return £2,125 of the £2,400 paid at the end of Stage 3, it couldn’t recover its issue fee, Stage 3 costs and had to pay the Defendant’s Stage 3 costs plus interest at 8%.

Two very different circumstances. I was very impressed with the first Claimant’s precarious Part B that paid dividends. It was very risky because Defendant could have accepted the very low Part B offer and would have undersettled. Providing express permission was obtained and the Claimant gave informed consent, all is well.

Information 

AJH Advocacy Limited, a Limited Company which is regulated by the Bar Standards Boards (entity number 190758), ceases trading on the 12th January 2026.

From the 12th January 2026 and onwards, Alec Hancock will practice as a Barrister at Magdalen Chambers in Exeter. For instructions on matters on or after 12th January 2026, please contact Magdalen Chambers via clerks@magdalenchambers.co.uk or by telephone on 01392 285 200.