What Is A Part 36 Offer?

Introduction

A Part 36 Offer sets out a written settlement proposal and gives the other party at least 21 days to accept it. If they don’t accept within that period and later fail to achieve a better outcome, they face costs and other consequences.

If a claimant fails to accept a defendant’s Part 36 Offer within the requisite 21-day period, but accepts at a later date, then the claimant will normally have to pay the defendant’s costs from the date when the 21-day period for acceptance expires, through to the date of acceptance or judgment.

For instance

However, the present position is that if a defendant fails to accept a claimant’s Part 36 Offer within the requisite 21-day period, but accepts at a later date, the defendant does not face any specific consequences other than the fact that it will have to pay the claimant’s solicitors’ costs for a longer period of time i.e. from the beginning of the proceedings to the date of acceptance and/or judgment.

It is only if a claimant beats its own Part 36 Offer at trial that a defendant can suffer any consequences. These include interest on the whole or part of the sum awarded, at rate not exceeding 10% above the base rate, costs on an indemnity basis from the date on which the 21-day period for acceptance expired, interest on those costs at a rate not exceeding 10% above the base rate, and an additional award of damages up to a maximum of £75,000.

However, from 6 April 2021, the Civil Procedure Rules reflect an amendment allowing a Part 36 Offer to include a provision for interest to accrue on the offered sum after the 21-day acceptance period. If the offer does not include such a provision, it counts as inclusive of all interest up to the date of acceptance—even if the other party accepts it after the 21-day period.

From 6 April 2021 onward, claimants’ solicitors will likely include a provision for interest to accrue on the offer if the other party accepts it after the 21-day period.

Conclusion

The Part 36 Rules do not specify the level of interest that can be claimed, but it is likely that claimants’ solicitors will claim interest of at least 8%.

If added, the interest clause prevents defendants from delaying acceptance without consequences before judgment.

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