Part 36 Offers

Question 1

Q: What is a Part 36 offer, and what is its purpose?

Answer 1

A:

A Part 36 offer is a formal settlement offer made under Part 36 of the CPR.

Its purpose is to:

• Exert pressure on opponents to accept reasonable offers.
• Ensure solicitors provide proper advice on settlement.
• Carry significant costs consequences if rejected and deemed reasonable by the court.

Question 2

Q: What are the formal requirements for a valid Part 36 offer?

Answer 2

A: A Part 36 offer must:

1. Be in writing and state it is made under Part 36 CPR.
2. Specify a relevant period of at least 21 days, during which the defendant agrees to pay the claimant’s costs if accepted.
3. Clearly state whether it applies to the whole claim, part of it, or includes a counterclaim.
4. Specify costs are inclusive of interest until the relevant period expires.

Question 3

Q: What are the effects of accepting a Part 36 offer within the relevant period?

Answer 3

Defendant’s Offer Accepted by Claimant:

• Defendant pays the agreed sum within 14 days.
• Claimant is entitled to have their costs paid for up to the acceptance date:
• Multi-track: Costs assessed on the standard basis if not agreed.
• Fast/Intermediate tracks: Fixed recoverable costs apply.

Claimant’s Offer Accepted by Defendant:
* Claimant is entitled to costs up to the acceptance date, assessed similarly

• Multi-Track- Costs assessed on the standard basis
  Fast/Intermediate Trak- Fixed Recoverable costs only

Question 4

Q: What happens if a Part 36 offer is accepted late?

Answer 4

Claimant accepts a defendant’s offer late:

• Defendant pays claimant’s costs up to Day 21.
• Claimant pays defendant’s costs from Day 22 to the acceptance date.

Defendant accepts a claimant’s offer late:

• Defendant pays all claimant’s costs up to the acceptance date.

Question 5

Q: What are the key consequences of non-acceptance of a Part 36 offer?

Answer 5

• Proceedings continue, and penalties apply if the court deems the offer reasonable.
• Penalties begin from Day 22 (the day after the relevant period ends) unless the court finds it unjust.

Question 6

Q: What are the court’s considerations for justness in imposing Part 36 penalties?

Answer 6

A: The court considers:

• Terms of the offer.
• Timing (e.g., proximity to trial).
• Availability of information to the offeree.
• Conduct of the parties.
• Whether the offer was a genuine attempt to settle.

Question 7

Q: What 5-things happen if the claimant wins at trial and beat their own Part 36 offer?

Answer 7

A: The defendant faces severe penalties, including:

1. Additional amount on damages awarded to the claimant:
   * 10% on the first £500,000.
   * 5% on the next £500,000 (capped at £75,000).
2. Enhanced interest on damages: Up to 10% above base rate from Day 22.
3. Costs on an indemnity basis: This applies to multi-track cases from Day 22.
4. Enhanced fixed costs (Fast/Intermediate tracks): 35% uplift on fixed recoverable costs.
5. Interest on costs: Up to 10% above base rate from Day 22.

Question 8

Q: What happens if the claimant wins at trial but does not beat their own Part 36 offer?

Answer 8

• No penalties apply.
• The claimant receives standard damages and costs as usual.

Question 9

Q: What happens if the claimant loses at trial after making a Part 36 offer?

Answer 9

The claimant is liable for the defendant’s costs if the claimant loses:
* Standard basis (multi-track).
* Fixed recoverable costs (fast/intermediate tracks).

Interest on costs applies from Day 22, typically 1–2% above base rate.

Question 10

Q: What happens if the claimant wins at trial and beats the defendant’s Part 36 offer?

Answer 10

The claimant is awarded damages and costs on a normal basis depending on the track:
* Standard basis (multi-track).
* Fixed costs (fast/intermediate tracks).
The defendant bears full costs; Part 36 has no further effect.

Question 11

Q: What happens if the claimant wins at trial but does not beat the defendant’s Part 36 offer?

Answer 11

A: Split costs order applies:

1. Up to Day 21:
   * Defendant pays the claimant’s costs (because the claimant won) on the standard basis or fixed costs.
2. From Day 22 to judgment:
   * Claimant pays the defendant’s costs.
   * Interest on these costs applies, typically 1–2% above base rate.
3. Claimant is also liable for their own post-Day 22 costs.

Question 12

Q: What happens if the claimant loses at trial after rejecting the defendant’s Part 36 offer?

Answer 12

The claimant pays the defendant’s costs:

• Standard basis (multi-track).
• Fixed recoverable costs (fast/intermediate tracks).

Interest on costs applies from Day 22, typically 1–2% above base rate. The claimant is NOT as heavily penalised as the defendant