Skelator, from Masters of the Universe, has been seen giving some rather unusual, unsavoury or disturbing advice online in the form of a meme. Once he has given his advice, he flees the scene (presumably away from He-Man). However, on this occasion, he has given some pretty helpful advice.
It is easy to forget that some junior fee earners have worked their way up in their law firm to that position and may not have had the same exposure and experience as their fellow colleagues. One of the topics I am asked about is Part 36.
Given that Skelator has decided to be mild-mannered on this occasion, I decided to follow suit and give some additional tips and tricks regarding Part 36.
Law of Contract does not apply to Part 36
One junior fee earner expressed hesitation about recommending a counter Part 36 offer when the other party’s offer was good. The reason they were concerned was because of the fundamental basis that a counter offer amounts to a rejection of the previous offer (Hyde v Wrench [1840] 3 Bev. 334).
I reassured the fee earner that Part 36 was a self-contained set of rules. I said it was akin to the purchase of land, i.e not subject to the usual provision of contract law. I referred them to the following subsections of Part 36:-
36.9
(1) A Part 36 offer can only be withdrawn, or its terms changed, if the offeree has not previously served notice of acceptance.
36.10
(1) Subject to rule 36.9(1), this rule applies where the offeror serves notice before expiry of the relevant period of withdrawal of the offer or change of its terms to be less advantageous to the offeree.
(2) Where this rule applies—
(a) if the offeree has not served notice of acceptance of the original offer by the expiry of the relevant period, the offeror’s notice has effect on the expiry of that period; and
(b) if the offeree serves notice of acceptance of the original offer before the expiry of the relevant period, that acceptance has effect unless the offeror applies to the court for permission to withdraw the offer or to change its terms—
(i) within 7 days of the offeree’s notice of acceptance; or (ii) if earlier, before the first day of trial.
(3) On an application under paragraph (2)(b), the court may give permission for the original offer to be withdrawn or its terms changed if satisfied that there has been a change of circumstances since the making of the original offer and that it is in the interests of justice to give permission.
36.11
(2) Subject to paragraphs (3) and (4) and to rule 36.12, a Part 36 offer may be accepted at any time (whether or not the offeree has subsequently made a different offer), unless it has already been withdrawn.
Obviously there are a few exceptions, but the point being is that it expressly states that a Part 36 offer, which is not withdrawn, is capable of being accepted at any time. The consequences that may follow from a late acceptance are, of course, a real risk.
It also applies when Part 36 and Calderbank offers are made in tandem. Of course, the principles of Part 36 do not transpose onto the Calderbank offer, and therefore, a counter offer (even if it is Part 36) is likely to be found to be a rejection under common law.
Part 36 offers are not binding for minors and protected parties untill it is approve by the Court
I was instructed to prepare an advice on quantum for a minor which had a combination of both a tariff and non-tariff injury. I provided my advice and then I was advised that those instructing me had received an offer that was far less than what I recommended and it had been accepted.
I referred them to CPR 21.10:-
21.10
(1) Where a claim is made –
(a) by or on behalf of a child or protected party; or
(b) against a child or protected party,
no settlement, compromise or payment (including any voluntary interim payment) and no acceptance of money paid into court shall be valid, so far as it relates to the claim by, on behalf of or against the child or protected party, without the approval of the court.
It was confirmed in Dunhill v Burgin [2014] UKSC 18 that the need to protect parties who could not make informed decisions and were at the mercy of their lawyers and litigation friends) prevailed over the general rule of contract law that any agreement is binding.
Consequently, not only could the Claimant technically withdraw their agreement subject to approval, the Court would consider the facts, evidence and advice and likely conclude that the offer was not in the Claimant’s best interest. However, the sensible approach was to revert to the Defendant, explain the correct position and seek a better settlement proposal.
This led to an amicable resolution without any conflict between the parties that incurred costs. Just do not disclose the advice on quantum; it’s a privileged document.
A defective Part 36 offer is still an offer
I constantly encourage fee earners to use an N242A when making a Part 36 offer. It can be very easy for a template to be altered to a point where it suddenly fails to meet the five criteria for a valid Part 36:-
- be in writing
- made clear to be pursuant to Part 36
- specify a relevant period of less than 21 days for which the Defendant will be liable for the Claimant’s costs if accepted.
- state whether it relates to the whole claim or a particular issue
- state whether it takes into account any counter claim
I recall one fee earner becoming very stressed and worried that a Part 36 offer was defective because they inadvertently deleted the reference to Part 36. They were concerned that the client, who had agreed to the settlement, had to be told that the settlement was invalid.
At that moment, I realised that the fee earner was so focused on the defect in the Part 36 offer that they had overlooked the fact that the offer itself was still valid. I reassured them that since the offer included the amount for damages and the liability for costs, there was nothing to worry about. As it was a settlement during live proceedings, the only issue was that Part 36 would have resulted in an automatic stay, so they needed to arrange for a Tomlin Order to stay the proceedings instead.
If the matter proceeds to a final hearing and the party beats a defective Part 36, then it will be taken into account under CPR 44 when the Court exercises discretion as to costs (Shaw v Merthyr Tydfil County Borough [2014] EWCA Civ 1678).
Part 36 consequences are mandatory in Stage 3 hearings, but there is some discretion in all other claims
It is often overlooked because most are familiar with the principle that the Court must apply Part 36 consequences unless it considers it unjust to do so. However, in Stage 3 proceedings, where a party is entitled to Part 36 benefits, it is compulsory:-
Costs consequences following judgment
36.29
(1) This rule applies where, on any determination by the court, the claimant obtains judgment against the defendant for an amount of damages that is—
(a) less than or equal to the amount of the defendant’s Protocol offer;
(b) more than the defendant’s Protocol offer but less than the claimant’s Protocol offer; or
(c) equal to or more than the claimant’s Protocol offer.
(2) Where paragraph (1)(a) applies, the court must order the claimant to pay—
(a) the fixed costs in rule 45.26; and
(b) interest on those fixed costs from the first business day after the deemed date of the Protocol offer under rule 36.26.
(3) Where paragraph (1)(b) applies, the court must order the defendant to pay the fixed costs in rule 45.20.
(4) Where paragraph (1)(c) applies, the court must order the defendant to pay—
(a) interest on the whole of the damages awarded at a rate not exceeding 10% above base rate for some or all of the period starting with the date specified in rule 36.26;
(b) the fixed costs in rule 45.20;
(c) interest on those fixed costs at a rate not exceeding 10% above base rate; and
(d) an additional amount calculated in accordance with rule 36.17(4)(d).
Information
AJH Advocacy Limited, a Limited Company which is regulated by the Bar Standards Boards (entity number 190758), ceases trading on the 12th January 2026.
From the 12th January 2026 and onwards, Alec Hancock will practice as a Barrister at Magdalen Chambers in Exeter. For instructions on matters on or after 12th January 2026, please contact Magdalen Chambers via clerks@magdalenchambers.co.uk or by telephone on 01392 285 200.