Part 36: costs consequences

by Practical Law Dispute Resolution

A practice note discussing the significant costs consequences of accepting or rejecting a Part 36 offer under the Civil Procedure Rules (CPR) in legal proceedings in England and Wales. This note focuses on offers made on or after 6 April 2015, outlining the principal costs orders that follow acceptance or non-acceptance of an offer by either a claimant or a defendant. It examines the outcomes of accepting an offer within or after the "relevant period" and how these differ. The practice note also explores the pivotal impact of the extended fixed recoverable costs (FRC) regime, which applies from 1 October 2023, on Part 36 costs, particularly for claims on the fast track and intermediate track. Guidance is provided on the circumstances where a court may consider it unjust to apply the usual Part 36 rules, including the distinction between standard basis and indemnity costs. It also considers pre-action offers, offers in appeals, and offers involving counterclaims. This is one of a series of practice notes on Part 36 offers.