Part 36 of the Civil Procedure Rules is designed to encourage settlement by imposing clear costs consequences where offers are not accepted within the relevant timeframe. However, issues often arise where a Part 36 offer is accepted after the expiry of the relevant period.

The late acceptance of a Part 36 offer can significantly affect liability for costs, particularly in civil litigation involving personal injury and road traffic accident claims.

Understanding how the court approaches these situations is essential when assessing risk and managing settlement strategy.

 

What Is a Part 36 Offer?

A Part 36 offer is a formal offer to settle made in accordance with the Civil Procedure Rules. It carries automatic costs consequences depending on whether it is accepted within the relevant period, which is usually 21 days.

If accepted within that period, the receiving party is typically entitled to recover costs up to the date of acceptance. If not accepted, and the matter proceeds to trial, the court may impose enhanced costs consequences depending on the outcome.

 

What Is Late Acceptance?

Late acceptance occurs where the offer is accepted after the expiry of the relevant period.

Once the relevant period has expired, the automatic costs protection associated with early acceptance no longer applies. Instead, the court must consider how costs should be dealt with in light of the timing of acceptance.

 

The General Position on Costs

Where a Part 36 offer is accepted late, the usual position is that:

• the claimant is entitled to their costs up to the expiry of the relevant period
• the defendant is entitled to their costs from that point onwards
• this creates a split in liability for costs reflecting the delay in acceptance

In most cases, this is the starting point the court will apply when determining liability.

 

When Can the Court Depart from the Usual Rule?

The court does retain discretion to depart from the usual costs consequences of late acceptance. However, this discretion is only exercised where it would be unjust to apply the standard rule.

In deciding whether to depart, the court will consider all the circumstances, including the conduct of the parties, whether the offer was a genuine attempt to settle, the timing of the offer and acceptance, whether there was sufficient opportunity to evaluate the offer within the relevant period, and any unreasonable delay or tactical behaviour.

The threshold for departing from the standard approach is deliberately high, reflecting the importance of certainty within Part 36.

 

Court Approach and Case Law Direction

The Court of Appeal has consistently reinforced the importance of applying Part 36 costs consequences unless there is a clear reason not to do so.

The courts have emphasised that parties are expected to engage properly with offers within the 21-day relevant period, that late acceptance should not normally allow a party to avoid standard costs consequences, and that departures from the usual rule require clear justification based on injustice.

This approach provides certainty and supports the policy objective of encouraging early settlement.

 

Interaction with Fixed Costs (Part 45)

The position becomes more complex in cases where fixed costs apply under Part 45, particularly in personal injury and road traffic accident claims.

In these cases, issues can arise as to whether fixed recoverable costs continue to apply following late acceptance, whether Part 36 overrides or modifies the fixed costs position in certain circumstances, and whether different stages of the claim attract different costs regimes depending on timing.

The interaction between Part 36 and fixed costs remains a developing and often contested area in civil litigation costs law.

 

Practical Implications of Late Acceptance

Late acceptance of a Part 36 offer can have significant financial consequences for both parties.

For the accepting party, it may result in exposure to additional costs liability that would have been avoided if the offer had been accepted within the relevant period. For the offering party, it can create an opportunity to recover costs for the period after expiry.

These consequences mean that late acceptance often becomes a key issue in costs negotiations and detailed assessment proceedings.

 

Strategic Considerations

Part 36 strategy requires careful consideration of timing, risk, and the strength of the underlying case.

Key considerations include:

• whether to accept within the relevant 21-day period
• the strength of the claim or defence
• likely costs consequences if the matter proceeds
• the impact of fixed costs regimes

Failing to engage properly with a Part 36 offer can materially affect the final costs outcome.

 

How Greener Costs Can Assist

Late acceptance of a Part 36 offer often leads to disputes over liability for costs and the correct application of the Civil Procedure Rules.

Greener Costs provides specialist support in all aspects of Part 36, including costs consequences following late acceptance, strategic settlement advice, and detailed assessment of costs.

Whether you are dealing with a dispute over liability for costs or seeking clarity on the impact of a Part 36 offer, expert guidance can help protect your position and ensure costs are properly managed.

If you require assistance, we welcome you to contact Greener Costs today:

📞 Call: 01204 263047
📧 Email:  info@greenercosts.co.uk

 

Frequently Asked Questions

What happens if a Part 36 offer is accepted after 21 days?

If accepted after the relevant period, the usual position is that costs are split, with each party liable for costs for different stages of the case depending on when acceptance occurred.

Can the court change the costs consequences of late acceptance?

Yes, but only where it would be unjust to apply the standard rule. The court has discretion but will only depart from the usual approach in limited circumstances.

Does late acceptance affect fixed costs cases?

It can do. In cases governed by fixed recoverable costs, late acceptance may create complexity in determining whether fixed costs or standard costs apply for different stages.

Is late acceptance common in civil litigation?

Yes, it frequently arises where offers are not properly evaluated within the 21-day period or where negotiations continue close to trial.