How Settlement Negotiations Work in Clinical Negligence

Settlement negotiations in clinical negligence claims in England and Wales refer to the discussions and offers made between a claimant and a defendant (typically a healthcare provider or their insurer) aimed at resolving a claim without going to court. Settlement avoids the cost, delay and stress of litigation and can result in agreed compensation for clinical injuries. Settlement negotiations are an integral part of the Pre‑Action Protocol for the Resolution of Clinical Disputes and the Civil Procedure Rules (CPR), particularly Part 36 offers, which structure formal settlement offers in litigation.

This article explains how settlement negotiations work, when they arise in the clinical negligence process, the role of formal and informal offers, Part 36 of the CPR, alternative dispute resolution (ADR) options, time limits, risks and strategic considerations for both parties.

The Context of Settlement Negotiations in Clinical Negligence

Early communication, full disclosure of evidence and genuine attempts to settle are expected under the Pre‑Action Protocol for the Resolution of Clinical Disputes. The Protocol obliges parties to explore negotiation and other dispute resolution methods rather than immediately resorting to court proceedings. Negotiations may begin once a Letter of Claim has been served, and the defendant has provided a Letter of Response. In many cases, settlement discussions continue throughout the pre‑action period and can also occur after proceedings are issued.

Parties often engage in negotiation because:

• Clinical negligence claims can be complex and costly to litigate.
• Both sides may wish to avoid the uncertainty of a trial.
• Early resolution can reduce legal expenses and provide compensation sooner.
• Courts and ADR frameworks encourage settlement where reasonable.

Informal and Without Prejudice Negotiations

Informal negotiations are typically conducted by solicitors acting for claimants and defendants or their insurers. These discussions may take place through written correspondence, telephone calls or meetings (such as round‑table settlement meetings). Communications that are “without prejudice” are used in genuine attempts to settle. This designation means that what is said or offered cannot later be used in court as evidence of liability or admissions of fault. It allows parties to speak freely about settlement without fear that the communications will affect the merits of their positions at trial.

Round‑table settlement meetings (sometimes referred to as RTMs) are joint negotiation sessions where the parties, and occasionally their medical or legal advisers, meet (in person or virtually) to discuss settlement. RTMs are more common in high‑value or complex cases and can be an effective forum for negotiating compensation collaboratively.

Formal Settlement Offers: Part 36 of the Civil Procedure Rules

The most important procedural mechanism for settlement negotiations in clinical negligence litigation is a Part 36 offer under the Civil Procedure Rules. A Part 36 offer is a formal written offer to settle the claim (or part of it) on specific terms and is widely used because of its potential cost‑consequences.

Key Features of a Part 36 Offer

• Written and compliant with CPR requirements: A valid Part 36 offer must be made in writing, clearly indicate that it is made under Part 36 of the CPR, and specify whether it relates to the whole claim or part of it.
• Relevant period: The offer must specify a minimum period of at least 21 days for the recipient to accept it. During this period, the offeror is generally liable for costs up to the date of acceptance. If unaccepted after this period, the offeror may be able to withdraw or vary the offer with court permission.
• Costs consequences: If a Part 36 offer is not accepted and the claimant fails to obtain a judgment more advantageous than the offer at trial, the rejecting party may face costs penalties and interest consequences. Courts may order payment of the offeror's costs on an indemnity basis from the end of the “relevant period” and additional interest. This feature encourages early settlement and penalises unreasonable refusal to accept a fair offer.

Part 36 offers can be made by either the claimant or the defendant and can occur before or after court proceedings are issued, as part of ongoing settlement negotiations.

Strategic Use of Part 36 Offers

Parties often make more than one Part 36 offer during negotiations. For example, a defendant might make an early offer that reflects perceived risks at trial, while a claimant might respond with a counter‑offer. Both sides need to consider:

• The strength and value of available evidence (medical reports, expert opinions and valuations of loss).
• The risks and uncertainties associated with litigation outcomes.
• Costs implications if the case proceeds to trial.

In some cases, a part settlement can be offered - for example, an amount covering part of the losses - if full settlement is not immediately agreeable.

Alternative Dispute Resolution (ADR) in Settlement Negotiations

In addition to formal offers under Part 36, the Pre‑Action Protocol encourages parties to consider alternative dispute resolution (ADR). ADR includes:

• Mediation: An independent mediator facilitates negotiations. The mediator does not decide the outcome but helps both parties reach agreement. Mediation can result in settlement on the day or shortly thereafter and is common in clinical negligence because it allows both sides to discuss issues openly under a structured framework.
• Early neutral evaluation: An independent expert gives an informed opinion on the case's strengths and weaknesses, which can help parties reassess their positions and negotiate with realistic expectations.
• Arbitration and other ADR mechanisms: These may be appropriate in specific circumstances where parties agree on an adjudicator or private process.

A refusal to engage constructively in ADR or settlement negotiations may influence costs decisions during litigation, as courts can consider whether a party unreasonably refused to attempt resolution.

Timing and Practical Steps in Settlement Negotiations

Pre‑Action Stage

Settlement discussions often begin at the pre‑action stage once a defendant has had the opportunity to investigate the claim, obtain medical records and prepare a Letter of Response. The Pre‑Action Protocol encourages settlement without court proceedings, and offers can be made at this stage - including formal Part 36 offers backed by preliminary medical evidence and schedules of loss.

Both claimants and defendants may make offers during this period. If the parties agree on liability or wish to explore resolution without admission of liability, they can negotiate a settlement amount and terms before issuing a claim.

After Proceedings Are Issued

If proceedings are issued, settlement negotiations continue. A Part 36 offer made after proceedings can still carry significant cost consequences at trial. Offers may be updated or renewed in light of further evidence, expert reports or changes in valuation. Negotiations can also be influenced by procedural steps such as disclosure and witness statements, which clarify strengths and weaknesses on both sides.

Acceptance and Implementation

Once a settlement offer is accepted (whether informal or under Part 36), both parties typically sign a settlement agreement that sets out the terms, including:

• The settlement sum.
• Any apology or statement agreed (without admission of liability).
• Cost allocation or how legal costs will be paid.
• Confidentiality clauses where relevant.

Settlement sums are then paid to the claimant through their solicitors. The claim is usually formally discontinued or dismissed by the court. If a Part 36 offer is accepted, costs consequences agreed in the offer will apply.

Risks and Considerations in Negotiations

Balancing Risks and Compensation

Both sides must balance the certainty of settlement against the risk and cost of litigation. A claimant needs to consider whether an offer adequately covers past and future losses, including medical costs, rehabilitation, pain and suffering, and other heads of damage. A defendant considers the strength of the claimant's case and the likelihood of an adverse judgment plus costs.

Costs Consequences of Offers

Part 36 creates potential costs penalties for unreasonable refusal to accept realistic offers. This makes strategic timing and content of offers important. An offer that is too low or made too early without adequate evidence may not be taken seriously; one that is too high may exceed commercial risk limits for insurers or defendants.

Willingness to Engage

Courts expect reasonable engagement in negotiations and ADR. A party's unwillingness to negotiate or engage in mediation could be taken into account in costs decisions, with adverse cost orders imposed for unreasonable refusal to try ADR.

Key Takeaways

Settlement negotiations in clinical negligence claims in England and Wales are a structured and strategic process aimed at avoiding litigation where possible. Negotiations begin early in the pre‑action protocol period and often proceed alongside evidence gathering and expert reports. Settlement can be achieved informally through without prejudice negotiations, through structured Part 36 offers under the Civil Procedure Rules, or by engaging in ADR such as mediation.

Formal Part 36 offers are powerful tools that create strategic cost implications if not accepted, encouraging realistic settlement where appropriate. Effective negotiation balances the need for fair compensation with litigation risk, costs, and timing. Understanding how settlement negotiations work helps claimants and defendants make informed decisions and manage clinical negligence claims efficiently and fairly.

James William Steven Parker

James is the founder of UKLegalGuides.com and a former agent at the Ministry of Justice (UK). With a background in processing legal claims, he launched this platform to make the laws of England and Wales accessible to everyone.