A Quick Guide To An Offer To Settle

Legal Service Provider In Malaysia For Corporate Law, Legal Advice, Legal Assistance, Commercial Litigation And Arbitration

A Quick Guide To An Offer To Settle

October 30, 2020 Public Interest Disputes 0

What is an offer to settle?

An offer to settle is a legal gesture whereby a party to a trial proposes to settle his/ her gripe with the opposite party out of court before the matter is decided in its finality in court. The offer could come in myriad forms i.e. abstinence, compensation, or even to perform a certain act. Some of the advantages (of an offer to settle) are as follows: 

  1. Reduce legal cost, provided that the parties are willing to accept the terms of the offer;
  2. It allows both parties to agree to a sum which both parties are willing to part with/receive instead of leaving the calculation of damages to the court; and
  3. The offending party does not have to admit to any liability.

In Order 22B of the Rules of Court. It is noted that such an offer: 

  1. Can be made and withdrawn at any time before the court decides on the outcome of the matter between the parties in court; and
  2. If such an offer to settle specifies the time in which one party needs to accept the offer, such offer is deemed to be withdrawn when the time expires.

**It can also be made to multiple parties jointly or individually if they are more than one party in proceedings.

How to make/ accept/ withdraw an offer to settle?

Making an offer (Form 34)

  1. The terms of the offer must be set out in numbered paragraphs.
  2. Set out the time in which the other party is to accept the offer.

Withdrawing an offer (Form 35)

  1. Can be withdrawn at any time, even if there is a clause specifying the expiry of the offer at a certain date.

Accepting an offer (Form 36)

  1. Set clearly the terms of accepting such an offer.
  2. Can accept the offer at any time before the determination of the case, offer lapsed or withdrawn.
  3. Upon acceptance of such an offer, the court can incorporate the terms into the offer.

If parties intend to settle the matter out of court, the court must not know of such an offer even if it is not accepted- not until all questions of liability and relief other than cost have been determined by the court.

Why? This would allow the court to make an impartial and independent assessment of the damages and claims of the matter without the influence of knowledge of the offer to settle, or at the very least, is seen to be making an impartial and independent assessment of the damages and claims.

What happens if a party accepts such an offer?

All parties must comply with the terms of the offer, and the matter is deemed to be settled save for the cost of instituting the claim in court.

What happens if a party does not comply with the terms of the agreed settlement?

If one party does not comply with the terms of the agreed settlement, the other party can continue to pursue the matter in court as if there is no offer to settle or the other party can make an application to the judge for a judgment according to what was agreed upon in the offer.



The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. For further inquiries, please email us at general@mathews.my.


Leave a Reply

Your email address will not be published. Required fields are marked *