Where a Part 36 offer is accepted within the relevant period for acceptance, the claimant is entitled to the costs of the proceedings up to the date on which notice of acceptance was served on the offeror. If a defendant’s Part 36 offer relates to part only of the claim, and, at the time of serving notice of acceptance, the claimant abandons the balance of the claim, the claimant is entitled only to the costs of that part of the claim unless the court orders otherwise. Costs under these provisions will be assessed on the standard basis if the amount of costs is not agreed (CPR 36.13(1) to (3)).

Where a Part 36 offer that was made less than 21 days before the start of trial is accepted, or such an offer is accepted after expiry of the time specified for acceptance, the court will make an order as to costs if the parties do not agree the liability for costs. Where the offer is accepted after the expiry of the relevant period, unless the court considers it unjust to do so, the court will order that the claimant is entitled to the costs of the proceedings up to the date on which the relevant period expired; and the offeree is liable for the offeror’s costs for the period from the date of the expiry of the relevant period to the date of acceptance. The claimant’s costs include any costs incurred in dealing with the defendant’s counterclaim if the Part 36 offer states that it takes the counterclaim into account (CPR 36.13(4) to (7)).

Where, upon judgment being entered, a claimant fails to obtain a judgment more advantageous than the defendant’s Part 36 offer, the court will order (unless it considers it is unjust to do so), that the defendant is entitled to his costs from the date on which the relevant period for acceptance expired; and interest on those costs.

Where the claimant does better than was proposed in the claimant’s Part 36 offer, CPR 36.17(4)(d) provides an additional reward. In such circumstances, the court will, unless it considers it unjust to do so, award the claimant an additional amount which shall not exceed £75,000 calculated by applying the prescribed percentage to an amount which is:

(i) where the claim is or includes a money claim, the sum awarded to the claimant by the court;

(ii) where the claim is only for a non-monetary claim, the sum awarded to the claimant by the court in respect of costs.

Where the amount awarded by the court is up to £500,000 the prescribed percentage is 10% of the amount awarded. Where the amount awarded by the court is above £500,000 the prescribed percentage is 10% of the first £500,000 and (subject to the limit of £75,000) 5% of any amount awarded above that figure.

CPR 36.17(4)(d) applies only to Part 36 offers made after 1 April 2013, whether in proceedings commenced before or after that date.