Part 36 Offers and the Cost of Saying No
A Part 36 offer is a formal settlement offer that carries automatic costs consequences. If you reject one and then fail to obtain a judgment more advantageous than it, the court must normally order you to pay the defendant’s costs from the date the offer expired, plus interest. This is the most common way a claimant who wins still ends up paying costs.
Why This Is the Trap Most People Miss
Direct Answer: Most claimants worry about losing. In practice the more common costs shock is rejecting an offer, going on to win, and recovering less than the offer was worth. Under CPR 36.17(3) the court must then, unless it considers it unjust, order that the defendant is entitled to its costs from expiry of the relevant period, together with interest on those costs.
The comparison is against the offer, not against zero. Winning is not the test.
What Follows, Either Way
| Situation | What the court must normally order |
|---|---|
| You reject the defendant’s offer and fail to beat it | Defendant’s costs from expiry of the relevant period, plus interest on those costs (CPR 36.17(3)) |
| You make an offer and obtain a judgment at least as advantageous | Interest on the sum awarded at up to 10% above base rate; your costs on the indemnity basis from expiry; interest on those costs at up to 10% above base rate; plus an additional amount (CPR 36.17(4)) |
The additional amount
Where you beat your own offer, CPR 36.17(4)(d) provides for an additional amount calculated at 10% of sums awarded up to £500,000 and 5% above that figure, subject to a maximum of £75,000. It is a genuine incentive to make realistic offers early.
In every case the court retains a discretion not to make these orders where it would be unjust to do so. That discretion is real but should not be relied on as a plan.
How QOCS Interacts With This
Qualified one-way costs shifting limits enforcement of a defendant’s costs order against a personal injury claimant — ordinarily up to the level of the damages and interest awarded. It does not prevent the order being made, and it is not a shield against making a poor decision on an offer.
It also protects less than it once did. Since 6 April 2023, CPR 44.14 permits enforcement against costs orders and agreements to pay made in the claimant’s favour, which reversed much of the practical effect of Ho v Adelekun. Read the full QOCS guide and what you pay if the claim fails.
How This Interacts With Your CFA and ATE Policy
This is the part most people never read until it matters. Your CFA should say what happens if your solicitor advises you to accept an offer and you reject it — some agreements allow the solicitor to terminate, or to charge their costs, in that situation. Any ATE policy will have its own equivalent term, and cover can be withdrawn where advice to settle is refused.
Read those two provisions together, before an offer arrives rather than after. A decision that looks like it only affects the claim can also affect whether you still have funding and insurance for it. See what a CFA contains and how ATE cover works.
What to Ask When an Offer Arrives
- Is this a Part 36 offer, and exactly when does the relevant period expire?
- What is your assessment of what the claim is realistically worth?
- What is my costs exposure if I reject it and do not beat it?
- How would QOCS apply to that exposure in my case?
- What does my CFA say happens if I reject an offer you advise me to accept?
- Should we be making our own Part 36 offer instead?
The decision is yours. Get the advice in writing, and do not let the relevant period expire while you think about it.
Frequently Asked Questions
Frequently Asked Questions
What is a Part 36 offer?
What happens if I reject an offer and lose?
Does QOCS protect me from Part 36 costs?
What if I make an offer and beat it?
Can my solicitor accept or reject an offer without me?
How long do I have to decide?
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Where this applies: This page covers England and Wales. The rules in Scotland and Northern Ireland are different.
Sources for this page
Every rule stated above is based on the primary sources below. Each link goes to the legislation, court rule or regulator itself so you can check it. Last verified 5 August 2026.
- Civil Procedure Rules, Part 36 (offers to settle)
Cost consequences of rejecting an offer and failing to beat it at trial.
- Civil Procedure Rules, Part 44 (incl. rr.44.13–44.17, QOCS)
Qualified one-way costs shifting and its exceptions. Rule 44.14 was amended with effect from 6 April 2023.
- Conditional Fee Agreements Order 2013, arts. 4–5 · in force from 1 April 2013
Art. 4 caps the success fee at 100% of base costs. Art. 5 caps what may be taken from damages in personal injury at 25% of PSLA plus past pecuniary loss, net of CRU, at first instance.
- SRA Standards and Regulations
Conduct rules for solicitors in England and Wales, including costs transparency.
Who wrote and checked this page
- Written and published by
- Edward & Amaury Solicitors (Edward & Amaury Ltd, company no. 12195443), regulated by the Solicitors Regulation Authority under no. 800525.
- Legal review
- Checked for England & Wales by Edward & Amaury Solicitors — Solicitors regulated by the SRA (no. 800525) (verify on the regulator’s register).Review is recorded against the firm. The individual reviewer is not named on this page.
- Review dates
- Last reviewed 5 August 2026. Next review due 5 February 2027.
Fee rules change. California’s medical malpractice fee limits changed on 1 January 2023, and the QOCS rules in England and Wales changed on 6 April 2023. If you spot something out of date, tell us — we publish corrections.