Late acceptance of Part 36 offer does not unlock standard costs where fixed costs applied at expiry of relevant period

England and Wales - March 2026

The Court of Appeal has clarified that a claimant who accepts a Part 36 offer after expiry of the “relevant period” for acceptance is entitled only to fixed costs if the fixed costs regime applied at the date on which the relevant period expired, regardless of any subsequent allocation to the multi-track. 

In Attersley v UK Insurance Limited [2026] EWCA Civ 217, the Court allowed the defendant insurer's appeal, holding that the former Rule 36.20 (the provisions of which are now contained in Part 36.23) governed the costs consequences in ex-RTA or EL/PL Protocol claims and is not disapplied by subsequent multi-track allocation. 

The relevant CPR 36 rules were amended by the Civil Procedure (Amendment) Rules 2023 (“the 2023 Rules”) for cases commencing after 1 October 2023. The Court of Appeal judgment refers to the rules in their pre-amended form. This article follows that approach. 

Background

The claimant was involved in a road traffic accident on 9 March 2018 and submitted a Claim Notification Form under the RTA Protocol. The claim exited the Protocol when the defendant disputed liability, and a Part 7 claim form was subsequently issued in February 2021, with the particulars of claim indicating damages of up to £150,000. 

On 4 March 2021, the defendant filed a defence admitting liability and made a Part 36 offer of £45,000, which the claimant did not accept within the 21-day relevant period.

The case was allocated to the multi-track in January 2022, with permission granted for multiple medical experts and a five-day trial estimate. 

On 14 July 2022, after the defendant applied to amend its defence to allege fundamental dishonesty regarding quantum, the claimant accepted the Part 36 offer. A covering letter stated that the acceptance was conditional on the claimant receiving reasonable assessed costs (rather than fixed costs), but it was agreed that, despite that, the acceptance of the offer was unequivocal and was a binding compromise as to the damages the defendant had agreed to pay the claimant. 

The key question was whether the claimant was entitled to fixed costs under Part 45 or standard basis costs following her late acceptance. It was agreed that, had the claimant accepted the offer within the relevant period, she would be entitled to fixed costs only. 

The decisions below

HHJ Duddridge at first instance held that the claimant was restricted to fixed costs, finding that the case fell within Section IIIA of Part 45 as an ex-Protocol claim and within Rule 36.20(4) because the offer was accepted after expiry of the relevant period. 

On appeal, Stacey J allowed the claimant's appeal, concluding that allocation to the multi-track disapplied the fixed costs regime entirely, relying on the decision in Qader v Esure Services Ltd [2016] EWCA Civ 1109. She held that, once allocated to the multi-track, the case fell within Rule 36.13 rather than Rule 36.20, entitling the claimant to standard basis costs. 

She rejected the argument that this would lead to the perverse outcome of rewarding tardy claimants, allowing them to game the system to recover higher costs. She considered that there may well be cases where a claimant has reasonably rejected an offer but, owing to a change of circumstances, later decides to accept it. 

She also rejected the alternative submission that the court should exercise its discretion to assess the claimant’s costs at a level equivalent to fixed costs, as had been endorsed by the Court of Appeal in Williams v The Secretary of State for Business, Energy and Industrial Strategy (in which CMS had acted for the defendant/appellant).

Stacy J concluded that Williams was concerned with a claimant’s unreasonable failure to follow a relevant pre-action protocol, distinguishing it from the present case. 

The applicable rules (prior to amendment by the 2023 Rules)

Rule 36.13 is the default provision governing the costs consequences of accepting a Part 36 offer. 

Rule 36.20 is a specific provision governing costs consequences in ex-RTA or EL/PL Protocol claims, under which claimants are entitled only to fixed costs as set out in the relevant Tables in Section IIIA of Part 45. 

If the offer is accepted after the relevant period, Rule 36.20(4) provides that the claimant receives fixed costs for the stage applicable at the date on which the relevant period expired—and no more. 

The Court of Appeal's decision

Lord Justice Miles, giving the lead judgment with which Lady Justice Falk and Lord Justice Lewison agreed, allowed the defendant's appeal. 

The Court held that Rule 36.20, rather than Rule 36.13, determines the costs consequences of accepting a Part 36 offer in an ex-Protocol case where the fixed costs regime applied at the date on which the relevant period expired. 

Rule 36.13 is expressly stated to be "subject to" Rule 36.20, meaning that where Rule 36.20 applies, Rule 36.13 does not. 

Crucially, the Court rejected the claimant's reliance on Qader as establishing that allocation to the multi-track retrospectively disapplies the fixed costs regime for all purposes. Lord Justice Miles explained that Qader was concerned only with whether a multi-track claim should be subject to fixed costs or costs management, and did not consider the interplay with Part 36 or any question of retrospective effect.

The words in Rule 45.29B, "and for so long as the claim is not allocated to the multi-track", do not require that a case be treated for all purposes as if it had never fallen within Section IIIA of Part 45. The Court noted that the phrase has a temporal element, connoting that until allocation to the multi-track, the claimant is entitled only to fixed costs. 

Conversely, where allocation to the multi-track has not occurred by the date on which the relevant period expires, 

“…there is no difficulty in giving effect to the plain language of the rule. The relevant date is that on which the relevant period contained in the offer expired; and in the present case that was a date on which the claim remained within the fixed costs regime.”

Rationale

The Court emphasised that its interpretation accords with the purpose of Part 36, which is to encourage early settlement by enabling defendants to anchor their costs liability to the costs environment applicable during the relevant period. 

It would, the Court observed, be "surprising" if a claimant became entitled to substantially greater costs by accepting an offer after the relevant period by reason of events occurring afterwards and outside the parties' control.

The Court also noted that requiring parties to guess, or the court to decide, whether a case which settled prior to allocation was subject to fixed costs would introduce a "damaging and unnecessary degree of uncertainty" into the scheme.

Comment

This decision provides important clarity on the interaction between Part 36 and the fixed costs regime for ex-Protocol claims. 

Defendants can now be confident that a well-timed Part 36 offer will cap their costs exposure at the fixed costs level applicable when the relevant period expires, even if the case is subsequently allocated to the multi-track. 

The judgment underscores that claimants cannot improve their costs position by delaying acceptance of an offer and relying on subsequent procedural developments. Such gaming of the rules will not be tolerated. Claimants in ex-Protocol cases should therefore give careful consideration to Part 36 offers within the relevant period, as late acceptance will not unlock standard costs merely because the case later moves to the multi-track. 

Notably, the Court did not express a  view on how the rules would operate where, in an ex- Protocol case, a Part 36 offer is made after allocation to the multi-track, or where the offer was made prior to allocation but relevant period expires afterwards, suggesting the Rules Committee may wish to clarify these scenarios “as the existing rules do not yield entirely straightforward answers and they would benefit from clarification.” 

That is undoubtedly true. Part 36 has given rise to confusion and dispute since its inception 27 years ago, and continues to do so.

Practitioners handling personal injury claims originating under the RTA or EL/PL Protocols should review their Part 36 strategy in light of this decision. Early tactical offers remain a powerful tool for defendants to limit costs exposure, whilst claimants must be mindful that the costs consequences of late acceptance are now firmly tied to the position at the end of the relevant period.