Part 36 offers explained
Part 36 of the Civil Procedure Rules creates a formal settlement offer mechanism with built-in costs consequences. Used carefully, Part 36 offers are one of the most powerful negotiating tools in UK litigation — they force the other side to take settlement offers seriously, because rejection that turns out to be wrong triggers automatic costs penalties. For PI claimants, understanding Part 36 is essential: a well-timed Part 36 offer can transform negotiation, and accepting (or rejecting) the other side’s Part 36 offer has direct consequences for the value you ultimately receive. This page explains the framework as it operates in 2026.
In this guide
- What a Part 36 offer is
- The costs consequences
- How a Part 36 offer is accepted
- When Part 36 is most useful
- Timing and tactics
- Withdrawal of Part 36 offers
- Tax-free additional amount
- Common Part 36 mistakes
- Frequently asked questions
- Related guides
- Our Partner's Fees Explained
- Check If You Could Claim Compensation For Your Injury
Most people who come to us would rather not handle a personal injury claim themselves. Our legal partner runs claims like this on a no win, no fee basis, gathers the evidence, deals with the other side’s insurer, and only takes a fee if your claim succeeds. You can also instruct a solicitor directly free of charge if you would rather, and the law gives you the same rights either way.
What a Part 36 offer is
A Part 36 offer is a formal written offer to settle a claim, made under and in compliance with CPR Part 36. It has specific requirements:
- Made in writing.
- States explicitly that it is made pursuant to Part 36.
- Specifies the period within which the offer is open (the “relevant period”) — at least 21 days.
- States whether it relates to the whole claim or part of it.
- States whether it includes any counterclaim.
- States any conditions attached.
Offers can be made by either side, at any stage of the proceedings, including before proceedings are issued. They can be made on a “without prejudice save as to costs” basis — meaning the existence of the offer can only be revealed to the court after liability and quantum have been decided.
The costs consequences
The whole point of Part 36 is the costs consequences. Different outcomes apply depending on who made the offer and whether it was beaten:
Claimant’s Part 36 offer
If the claimant makes a Part 36 offer and the defendant fails to beat it at trial (i.e. the claimant gets at least as much as they offered to accept):
- The defendant pays the claimant’s costs on the indemnity basis from the end of the relevant period.
- Interest on those costs at up to 10% above base rate.
- Interest on damages at up to 10% above base rate from the end of the relevant period.
- An “additional amount” — 10% of damages up to £500,000, and 5% of damages between £500,000 and £1 million. The cap was £75,000 from 1 April 2013.
These are substantial penalties — particularly the indemnity costs basis (which is higher than standard basis) and the additional amount.
Defendant’s Part 36 offer
If the defendant makes a Part 36 offer and the claimant fails to beat it at trial (i.e. the claimant gets less than the defendant offered):
- The claimant pays the defendant’s costs from the end of the relevant period (subject to QOCS limits).
- Interest on those costs.
- The claimant loses entitlement to costs they would otherwise have got from the end of the relevant period.
Qualified One-Way Costs Shifting (QOCS) explained.
How a Part 36 offer is accepted
Acceptance:
- Written notice of acceptance, served on the offeror.
- Acceptance within the relevant period (typically 21 days) creates a binding settlement.
- Late acceptance (after the relevant period) is still possible — but the costs consequences shift, typically to the acceptor paying the offeror’s costs since the end of the relevant period.
- Some categories of offer can be accepted only with court permission (e.g. where the case has progressed substantially).
Acceptance creates a binding settlement on the terms of the offer. The court then orders payment of damages and costs as appropriate.
When Part 36 is most useful
For claimants
Claimants typically make Part 36 offers when:
- They are confident the case is worth at least the amount offered.
- They want to apply costs pressure on the defendant.
- They are willing to accept the figure (because if accepted, they’re bound).
- The case has matured enough to value reliably.
A well-pitched claimant Part 36 offer at a figure the defendant cannot beat is one of the most effective negotiating tactics available.
For defendants
Defendants typically make Part 36 offers when:
- They want to limit their costs exposure.
- They have a defensible position on quantum that the claimant might be persuaded to accept.
- They want to apply pressure for the claimant to settle before incurring more costs.
Defendant offers force claimants to weigh the risk of failing to beat the offer at trial.
Timing and tactics
Effective Part 36 offers are well-timed:
- Too early — before evidence is in, the figure might be off. The offer triggers costs consequences but may not reflect the case’s true value.
- Too late — close to trial, the costs consequences are limited because most costs have already been incurred.
- Sweet spot — typically after medical evidence is in but before the case is allocated to a track. The other side has enough information to make a sensible decision but still faces meaningful costs exposure.
Solicitors plan Part 36 offers strategically as part of the broader negotiation. Sometimes a series of offers is made — each escalating — to maximise costs leverage.
Withdrawal of Part 36 offers
A Part 36 offer can be withdrawn:
- Before the relevant period expires — with the court’s permission (CPR 36.10).
- After the relevant period — automatically lapses if not accepted within the period, but the costs consequences remain.
- By written notice in either case.
Reducing the offer is technically a new offer, with a new relevant period. Increasing the offer reactivates the costs consequences from the original date.
Tax-free additional amount
A particularly attractive feature of claimant’s Part 36 offers: the “additional amount” payable by the defendant if they fail to beat the offer (10% of damages up to £500k, 5% between £500k-£1m, capped at £75,000) is tax-free, just like the underlying damages.
This means a Part 36 offer that’s correctly pitched can generate significant additional value if the case goes to trial and the offer is vindicated.
Common Part 36 mistakes
Errors that undermine Part 36 effectiveness:
- Pitching the offer too high — failure to beat the offer is the goal. An aspirational offer that can’t be beaten at trial provides no costs pressure.
- Pitching too low — if the defendant accepts a low offer, the claimant is bound at a sub-optimal figure.
- Procedural errors — failure to comply with Part 36’s technical requirements (relevant period, written form, “Part 36” labelling) can make the offer ineffective.
- Late offers — offers made too close to trial provide minimal costs leverage.
- Multiple unrelated offers — confusing the costs picture if not carefully managed.
Frequently asked questions
If I accept a Part 36 offer, what happens?
You’re bound to settle on the terms of the offer. The defendant pays the amount offered plus your costs up to acceptance. The case concludes.
What if I reject a defendant’s Part 36 offer and then settle for less?
You’ll typically be ordered to pay the defendant’s costs from the end of the relevant period until settlement. QOCS limits the recovery to the level of damages awarded, but the costs you would have received are forfeited.
Can my solicitor make a Part 36 offer without my consent?
No — Part 36 offers commit the client. Your solicitor will discuss the proposed offer with you and seek your authority before making it. Equally, your solicitor needs your authority to accept or reject a Part 36 offer from the other side.
How long is a Part 36 offer open for?
The relevant period is at least 21 days. After the relevant period, the offer remains open (unless withdrawn) but the costs consequences are now active — late acceptance carries adverse costs implications for the acceptor.
Can the offer be made before I issue proceedings?
Yes — Part 36 offers can be made at any time, including pre-action. Pre-action offers can be particularly effective because they limit the defendant’s exposure before significant costs have built up.
Are Part 36 offers public?
No — they’re made on a “without prejudice save as to costs” basis. The existence and terms of the offer are not revealed to the trial judge until liability and quantum have been decided. Then the costs argument considers the offer.
Can I make a Part 36 offer in the OIC portal?
The OIC portal has its own offer-and-acceptance process which is broadly modelled on Part 36 but operates within the portal’s framework. The same principle applies — accepting an offer in the portal binds you to the figure.
Related guides
- How a personal injury claim works step by step
- Qualified One-Way Costs Shifting (QOCS) explained
- What happens when liability is admitted
- Fixed Recoverable Costs (FRC) explained
- When personal injury claims go to court
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