CPR 36 (“Part 36”) applies to detailed assessment proceedings by virtue of CPR 47.20(4). In order to align the terminology in Part 36:

(a) the receiving party = the claimant
(b) the paying party = the defendant
(c) the detailed assessment hearing = the trial
(d) the amount of the bill as assessed = the judgment

The detailed provisions of Part 36 and the accompanying Practice Direction fall outside the scope of this Guide. Any person wishing to make a Part 36 offer should refer to those provisions (and where applicable CPR 44 Part II and the Practice Direction dealing with Qualified One-Way Costs Shifting). A short summary of the relevant provisions of Part 36 is as follows:

(i) Either party may, at any time, make a formal settlement offer in accordance with Part 36. If the paying party makes such an offer and it is accepted by the receiving party within the specified period for acceptance, the receiving party will also receive its costs of assessment to the date of acceptance.

(ii) If the receiving party does not accept and the bill is assessed at no more than the paying party’s Part 36 offer, the normal rule will be that the receiving party must meet the paying party’s costs of assessment, with interest, from the end of the specified period for acceptance. If the receiving party accepts the offer after the period for acceptance expires, the receiving party will normally have to pay the paying party’s costs from that point.

(iii) If the receiving party makes a Part 36 offer, the paying party does not accept and the bill is assessed at as much as or more than that offer, the paying party will normally have to pay, from the end of the specified period for acceptance, interest at up to 10% above base rate on the bill as assessed, the costs of assessment on the indemnity basis and interest on those costs, again at up to 10% above base rate. It shall also, unless it is established that it is unjust to do so, have to pay an extra 10% of the bill as assessed (reduced to 5% for any amount over £500,000 and capped at £75,000 in total).

(iv) A Part 36 offer may not be accepted after the commencement of the detailed assessment hearing except by agreement (CPR 36.11(3)).

Excerpt from the Senior Courts Costs Office Guide 2021