A Part 36 Offer is an offer to settle, which is not only used
to encourage settlement, but can also be used tactically, to
improve and protect a party's position on costs.
The premise behind a part 36 Offer is that a party who has been
dragged to trial, having tried to be reasonable, should be
compensated. Likewise an unreasonable party, who insists on trial,
should be penalised.
The rules governing such offers are set out in Part 36 of the
Civil Procedure Rules.
Either party can make the offer at any time, though if made
less than 21 days before trial, the automatic costs consequences
will not follow and its effects on costs will be at the discretion
of the court.
A Part 36 offer can even be made before proceedings have begun
(known as a pre-action offer).
A Part 36 offer is made when served on the offeree.
A Part 36 offer can be made in respect of the whole of the
claim, part of the claim, counterclaims, appeals and
A Part 36 offer is accepted by serving notice of acceptance on
If a Part 36 offer is accepted, the claim will be stayed.
A Part 36 offer must:
be in writing;
make clear that it is made pursuant to Part 36 of the Civil
specify a period of no less than 21 days within which the
defendant will be liable for the claimant's costs if the offer
state whether it relates to the whole or part of the claim, or
to an issue that arises in it and if so to which part or
state whether it takes into account any counterclaim; and
be an offer to pay a single sum of money, not instalments.
Clarifying, amending and withdrawing an offer
The offeree may, within 7 days of receiving the offer, request
the offeror to clarify the offer.
An offeror can withdraw or change the terms of its Part 36
offer if the offeree has not served an offer of acceptance.
The offeror can withdraw or amend the offer by serving written
notice of withdrawal or change of terms on the offeree.
If the offeror amends the offer to make it more advantageous to
the offeree, it will be treated as the making of a new Part 36
Ensure that your Part 36 offer complies with the format
requirements – these are strict.
A Part 36 Offer will be considered "without prejudice
except as to costs" which means that a Part 36 offer may not
be put before the court as evidence before the case has been
decided. However, best practice is to head the Part 36 offer
"without prejudice save as to costs".
The offer should make it clear whether it includes interest or
not – if not addressed, the offer will be treated as
inclusive of interest until the date in which the offer expires or
21 days after the date the offer was made.
You must formally withdraw your Part 36 offer at the end of the
period for which it is stated to remain open, as otherwise it
technically remains open.
If you are a defendant making an offer, ensure that the offer
states that the sum will be paid within 14 days of acceptance;
otherwise it will not be treated as a Part 36 Offer if the claimant
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The English Commercial Court has published two recent judgments of Mr Justice Popplewell in a single anonymised case concerning the removal of two arbitrators under section 24(1)(d)(i) of the Arbitration Act 1996.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).