Part 36 offers are designed to be simple: beat the offer, or don’t, and the costs consequences under CPR 36.17 follow accordingly. Split trials complicate that simplicity considerably. Where liability and quantum are determined separately, working out whether a claimant has “obtained a judgment more advantageous” than an offer isn’t always straightforward, and getting it wrong can leave a client exposed to costs they didn’t expect.

As costs draftsmen, we’re frequently asked to advise on exactly this scenario: a case has gone to a split trial, offers were made along the way, and nobody is quite sure how the costs order should look. Here’s what the current position actually is.

What Is a Split Trial?

A split trial separates a case into distinct stages, most commonly liability and quantum, so that each is determined at a different hearing. Courts order split trials for case management reasons, often where liability is genuinely in dispute, but quantum would involve significant, potentially wasted expense if liability were ultimately lost. Once liability is decided, the parties either settle quantum or proceed to a second trial to determine it.

This structure makes obvious sense for managing litigation efficiently. It makes considerably less sense for Part 36, which was built around a single comparison: judgment sum versus offer sum, in money terms.

Why Part 36 Offers Get Complicated in Split Trials

CPR 36.17 applies where a claimant fails to obtain a judgment more advantageous than a defendant’s Part 36 offer. That comparison is straightforward in a single-trial money claim. It becomes far harder where liability is decided first, in isolation, with quantum still to come.

The core difficulty is that liability, on its own, isn’t a monetary value. A liability-only offer, for example, an offer to accept judgment on a 90/10 basis, doesn’t automatically trigger the usual Part 36 cost consequences, because there’s no judgment sum yet against which to measure it. The courts have made clear that liability will only be treated as genuinely divisible for these purposes in limited circumstances, such as a clear issue of contributory negligence, or a split trial where liability is being determined as a distinct and severable question.

Even then, the courts have shown real caution about split-liability offers being used tactically. Where a claimant makes a “90/10” liability offer purely to lock in a costs advantage regardless of the eventual damages figure, rather than as a genuine attempt to settle the proceedings, the offer risks being treated as ineffective for Part 36 purposes altogether.

The Genuine Attempt to Settle Requirement

This is the point costs draftsmen need to watch most closely. The court must take into account whether an offer was a genuine attempt to settle the proceedings, not simply a device engineered to secure a costs windfall. A split liability offer pitched at a level the defendant was always going to lose on anyway offers little real settlement incentive; it looks more like an attempt to guarantee a costs order than a genuine compromise.

Where the court concludes an offer wasn’t genuine in this sense, it can decline to apply the usual CPR 36.17 consequences, even where the offer was, in isolation, technically beaten. This makes the drafting of any liability-only or split offer just as important as the decision to make one at all.

Waiting for the Full Picture

Where a defendant’s Part 36 offer covers the whole claim rather than being limited to the issues decided at the liability trial, the court may simply be unable to make a costs order once liability has been determined. It’s an important limitation: winning at the liability stage doesn’t necessarily mean an immediate costs award follows, if there’s a live, whole claim Part 36 offer still on the table and quantum hasn’t yet been resolved. The court needs the full judgment figure before it can properly compare it to the offer, so any costs decision may have to wait until quantum is known.

This has a direct practical consequence: a party that succeeds on liability but wants to bank a costs order straight away should think carefully about whether the other side’s outstanding Part 36 offer is limited to the issues already decided, or whether it covers the claim as a whole.

Practical Drafting Points for Costs Draftsmen

A few points are worth building into advice on split trials from the outset:

• Any liability-only Part 36 offer should be drafted with real care, addressing why the split reflects a genuine litigation risk rather than a foregone conclusion.
• Where a whole-claim offer is already on the table, be alive to the risk that costs following a liability trial may simply have to wait for the quantum stage.
• Keep a clear record of the conduct of the parties throughout, since this remains relevant to costs even where CPR 36.17’s automatic consequences don’t cleanly apply.
• Where costs orders following a split trial are contested, be ready to argue the point on the genuineness of any offer, not just on whether it was technically beaten.

Quick FAQs

Can a Part 36 offer be limited to liability only? Yes, but it won’t reliably trigger the usual CPR 36.17 costs consequences unless liability is genuinely divisible, such as in a split trial or a clear contributory negligence dispute.

Does winning the liability trial guarantee a costs order? Not necessarily. If the other side has an outstanding Part 36 offer covering the whole claim, the court may need to wait until quantum is decided before making any costs order.

What makes a split-liability Part 36 offer “genuine”? The court looks at whether the offer represented a real attempt to settle the proceedings, reflecting genuine litigation risk, rather than being pitched to guarantee a costs advantage regardless of the outcome.

How Greener Costs Can Help

Our team of costs draftsmen regularly advises solicitors on structuring and responding to Part 36 offers in split trial litigation, and on the costs consequences that follow once liability and quantum are both known.

If you’d like advice on a Part 36 offer or costs order in split trial proceedings, get in touch with the Greener Costs team today for a free, no-obligation discussion; call us on 01204 263047 or email info@greenercosts.co.uk.