Part 36 Offers – When and How to Make Them

If you’re bringing a civil claim against a third party, you may be unsure how to handle an offer to settle. Typically, this is a Part 36 offer under the Civil Procedure Rules (CPR) Part 36..

Part 36 offers are a powerful settlement tool. Used well, they can create real costs pressure on the other side and unlock resolution long before trial. Used badly, they can expose you to adverse costs and weaken your negotiating position.

In this guide, we explain what Part 36 offers are, when to use them, the formalities that make them valid, and the costs consequences of accepting or rejecting them—so you can make confident, tactical decisions.

What Is a Part 36 Offer and What Can It Cover?

Under the Civil Procedure Rules Part 36, either the claimant or the defendant can make a formal settlement offer to the other side. Called a Part 36, these offers can be put forward at any stage in the proceedings, including before the start of court action.

The value of the claim must exceed £10,000, so Part 36 is only relevant to Fast Track or Multi-Track proceedings. They cannot be used for the Small Claims Track.

A Part 36 offer usually proposes a monetary settlement but can also address non‑monetary relief. Importantly, it carries significant implications for costs.

Formal Requirements and Validity

For a Part 36 offer to be valid, it must adhere to the specific procedural requirements stated in CPR 36. In particular, it must be in writing, state on its face that it is intended to have the costs consequences of Part 36, specify the relevant period (a period of at least 21 days), and make clear whether it relates to all or part of the claim (and any counterclaim). Where money is offered, the offer should also state whether it includes interest.

A Form N242A should be enclosed, completed, and signed..

Part 36 offers should be made on a ‘without prejudice save as to costs’ basis. Doing this means they are privileged, which means the court cannot see them until after it has made its judgment (if matters go that far).

If a party wishes to accept a Part 36 offer, this acceptance must be in writing. There is a Notice of Acceptance at the end of Form N242A, which should also accompany the written agreement.

If an offer is made fewer than 21 days before trial, the relevant period still needs to be specified but its operation on costs may be affected by the timing and any court orders.

Acceptance, Withdrawal, and Changes

If a party wishes to accept a Part 36 offer, they can do so at any time provided it has not been withdrawn.

If there is more than one Part 36 offer on the table, the receiving party can accept an earlier version that may be more favourable, provided it hasn’t been withdrawn. If the trial has started, then you’ll need the court’s permission to accept an offer.

An offeror may not withdraw or reduce the favourability of terms of a Part 36 offer during the relevant period without the court’s permission. After the relevant period expires, the offer can be withdrawn or improved/reduced without permission (subject to the rules on acceptance and costs).

Costs, Consequences, and Risks

Making, accepting, or rejecting Part 36 offers has consequences in terms of future compensation awards and costs.

If a claimant accepts a defendant’s Part 36 offer within the relevant period, the claimant is entitled to their costs up to the date of acceptance on the standard basis.

If a claimant beats their own Part 36 offer at trial (i.e. obtains a judgment at least as advantageous as their offer), the court must, unless it considers it unjust, award: (1) interest on damages at a rate not exceeding 10% above base rate from the end of the relevant period; (2) costs on the indemnity basis from the end of the relevant period; (3) interest on those costs at a rate not exceeding 10% above base rate; and (4) an additional amount on the judgment sum (10% of the first £500,000 and 5% of any amount above that, capped at £75,000). 

Conversely, if a claimant fails to obtain a judgment more advantageous than a defendant’s Part 36 offer, the claimant will, unless unjust, be ordered to pay the defendant’s costs from the end of the relevant period, together with interest on those costs.

If an offer is accepted after the relevant period expires, the default position is that costs are for the court to determine if not agreed, taking into account the parties’ conduct and the timing of acceptance. The court will usually assess costs on the standard basis unless there is good reason to do otherwise.

Timing and Effect on Proceedings

Part 36 offers are a strategic tool in civil litigation. When an offer is made and whether (and when) it is accepted will shape settlement tactics and costs exposure.

If a valid Part 36 offer is made and accepted, the sum in question must be paid within 14 days of acceptance. At this point, the claim will be deemed to have been resolved, and no further action will be taken. The parties can agree to vary this period, provided that the variation is recorded in writing.

If the defendant doesn’t pay the sum agreed within 14 days or a longer agreed period, the claimant may apply to the court and ask for judgement against the defendant for the unpaid money.

If the claim is not financial, the claimant may apply to the court for an order to enforce the terms of the offer.

Frequently Asked Questions

How Much Is a Part 36 Offer?

The value of a Part 36 offer is unique to each case and depends on the specific claim and the proposed settlement amount. A Part 36 offer won’t include costs which are dealt with separately. There is a risk when accepting or rejecting an offer that the court will award a higher or lower amount.

Who Pays Costs if a Part 36 Offer Is Accepted?

The costs are typically paid by the person making the offer. If the offer is accepted by the other party during the relevant period, the claimant is entitled to recover their costs up to the date of acceptance. If the offer is accepted outside the relevant period, the parties agree on the costs. The court only gets involved if they cannot agree.

Is a Part 36 offer the same as a “Calderbank” offer?

No. A Calderbank offer is “without prejudice save as to costs” but does not carry the automatic CPR 36 costs consequences. Part 36 provides a bespoke, rules‑based regime designed to encourage settlement.

Clear Guidance Helps Parties Navigate Part 36 Decisions

Part 36 offers that are well-positioned can exert a huge amount of pressure on a claimant to settle. Reject, and the claimant may be penalised for not accepting the offer, and must pay some of the defendant’s costs, even though they have judgement in their favour.

Part 36 offers are part of the ‘cat and mouse’ game of negotiation and settlement in civil disputes. It’s vital to understand how to use a Part 36 offer tactically, as well as how to respond to one.

Our experienced commercial team at Helix Law is expert at supporting clients through every stage of the claims process, including strategies around Part 36 offers before and during a trial. Contact Helix Law today for more information and support.