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The Island of Part 36

  • United Kingdom
  • Personal injury claims litigation

03-10-2022

  • Recent cases;
  • What we as defendants need to know and remember;
  • Is it worth making an early offer?

A Part 36 offer is made by any party, at any point during a claim. It is an offer made on a without prejudice basis, with the exception of costs and is designed to encourage parties to settle the claim without proceeding to court. Part 36 of the Civil Procedure Rules is a self-contained code, which produces consequences if an offer is made, not accepted, and then later beaten.

1.1             Validity of Part 36 Offers

A Part 36 offer must be accurately drafted as a badly drafted Part 36 offer could be deemed invalid. Most drafting errors can be avoided by using the Part 36 Offer Form (N242a).

Mistakes in drafting may lead to challenge. In a case where the claimant accidentally offered 80/20 in the defendant’s favour. The defendant accepted the offer and when the claimant issued an application for permission to withdraw the offer, the defendant argued that a Part 36 offer is a self-contained code and therefore the common law doctrine of mistake could not be applied.  It was eventually decided that the background of the law of contract could be applied to an offer under Part 36. Whilst the claimant was successful in rectifying their mistake on this occasion, it would have been a costly exercise and other, possibly less obvious mistakes, may well have a different outcome.1

It is worth noting that a Part 36 offer must also be formally served (36.7(2)), not merely sent by e-mail.2

1.2             Effect  of a Part 36  / Consideration on making Part 36

3The Court of Appeal provided some useful guidance on Part 36 wording when breach of duty and/ or causation is not admitted in full.

  • cases of this kind turn, inevitably, on the precise wording of the pleadings and the specific terms of the Part 36 offer;
  • it is important to express whether the offer relates to the whole claim or part of it and/or state the precise issue to which it relates, in accordance with CPR 36.5(1)(d); and
  • if the issue to be settled is “liability”, it would be sensible to make clear whether the defendant is being invited to admit a breach of duty only, or what damage the defendant is being specifically invited to accept was caused by the breach of duty.

1.3             Consequences of failing to beat a Part 36

It is rare for a court not to award a claimant the usual mandatory benefits when they achieve a judgment more advantageous than an earlier Part 36 offer they have made, on the basis it would be unjust to do so. However, there was a case at the high court in 2021 which did just that.  The claimant having filed influential witness evidence very late in the day. 4

Another case in 2021 was better known for its outcome on the alleged fundamental dishonesty (FD) pleading. The claimant was found to have exaggerated, though not enough to render a finding of FD. The defendant appealed the issue on costs and alleged it was unjust for them to be ordered to pay the claimant’s costs on an indemnity basis, having not accepted an earlier Part 36 offer. The Judge reconsidered the circumstances and outcome of the case but dismissed the appeal on the basis that  the claimant had made a reasonable offer, he had established his claim at trial and overcome the FD pleading. 5

If a claimant accepts an offer out of time and argues that it is unjust for them to pay costs because the late acceptance was due to an uncertain prognosis, if the offer is clear, well-judged and not too early to reasonably evaluate the claim. the argument is unlikely to be successful. 6

A court will only interfere with the normal operation of Part 36 sanctions when particularly late evidence is filed and that evidence substantially changes the case, therefore causing significant prejudice to the other party.

Part 36 is intended to be a two-way straight and narrow highway, with a significant limitation on escape lanes.”7

1.4             The consequences of Part 36 offers when a trial is adjourned

A Part 36 offer must state a period of at least 21 days during which it can be accepted. The only exception to this is when the offer is made less than 21 days before trial. In that case if you want the costs consequences to apply you must make an application to the court to abridge the period for acceptance.

So what happens if a Part 36 offer is made 10 days before trial but the trial is then adjourned for over a year? Is the offer valid or does it need to be remade including a clear statement of a period for acceptance? The answer seems to be that the offer is valid but only if an application to abridge the period for acceptance is actually made, and made within a reasonable time period.8

1.5             The key takeaways are:-

  • It is difficult to persuade a court to depart from the usual Part 36 consequences, especially when a claimant beats their own offer;
  • It is crucial to understand the risks and possible consequences when considering a Part 36 offer;
  • An offer should be carefully and accurately drafted, using an N242a form;
  • A well-judged early offer has significant benefits to a defendant;
  • There is no cost to making an early Part 36 offer, but there is the potential for substantial savings;
  • The wording should be precise, particularly if the detail of the case renders the matter complex in terms of breach of duty and causation.
  • Always bear in mind the timescales in making a Part 36 offer, ensuring at least 21 days before trial where possible.

For further advice or guidance please contact ElisaVanhinsbergh@eversheds-sutherland.com


1.  O'Grady -v- B15 Group Limited [2022] EWHC 67 (QB)

2.  London Trocadero (2015) LLP v Picturehouse Cinemas Ltd [2021] EWHC 3103 (Ch

3.  Seabrook v Adam [2021] EWCA Civ 382

4.  Head v The Culver Heating Co Ltd [2021] EWHC 1235 (QB).

5.  Elgamal v Westminster City Council [2021] EWHC 2510 (QB)

6.  MRA v The Education Fellowship Ltd 2022 EWHC 1069 (QB)

7. Holly Wright (& others) -v- Birmingham City Council 2022

8. Reader v SPIE Ltd & Anor [2021] EWHC 1221 (QB