A claimant firm makes a Part 36 offer in a housing disrepair claim, the defendant does not accept it, and the claim goes on to judgment at or above the offer. The question that then arrives on the costs file is what that is actually worth — and the answer depends first on a question most Points of Dispute never reach.
Which Part 36 costs rule applies to this claim? There are two, they produce different outcomes, and which one governs turns on whether the claim is in fixed recoverable costs.
Two regimes, two rules
| If the claim is… | Acceptance | Judgment |
|---|---|---|
| Assessed on the standard basis | CPR 36.13 | CPR 36.17 |
| Within a fixed recoverable costs regime | CPR 36.23 | CPR 36.24 |
Rule 36.24 does not sit alongside 36.17 — it modifies it. So the familiar package of indemnity costs and a 10% uplift is not what a fixed costs case produces, and advancing it as though it were is a quick way to lose credibility on the rest of the bill.
For housing disrepair the regime question is live rather than academic, and we deal with it separately in whether HDR claims are still standard basis. Settle that first. Everything below follows from it.
What beating your own offer is worth on the standard basis
CPR 36.17(1)(b) is engaged where judgment against the defendant is “at least as advantageous to the claimant as the proposals contained in a claimant’s Part 36 offer”. Note the threshold: at least as advantageous, so matching the offer is enough. The defendant’s side of the rule is stricter — under 36.17(1)(a) the claimant must fail to obtain a judgment “more advantageous” than the defendant’s offer.
Where 36.17(1)(b) applies, rule 36.17(4) requires the court to order, unless unjust:
| Rule | Entitlement |
|---|---|
| 36.17(4)(a) | Interest on the sum awarded, excluding interest, at up to 10% above base rate |
| 36.17(4)(b) | Costs on the indemnity basis, including recoverable pre-action costs, from the date the relevant period expired |
| 36.17(4)(c) | Interest on those costs at up to 10% above base rate |
| 36.17(4)(d) | An additional amount of 10% of the sum awarded, capped at £75,000 |
Why (b) matters more than (d) in a disrepair claim
The additional amount attracts the attention because it is a number. In housing disrepair it is usually the least valuable of the four. Ten per cent of a modest disrepair award is a small sum, and the cap is irrelevant at these values.
The provision that carries the value is 36.17(4)(b), and the reason is the basis rather than the rate. Proportionality does not apply on the indemnity basis. Proportionality is where disrepair bills are cut — it is the first of the twelve reductions we set out in the most common HDR reductions — so a rule that removes it from part of the bill is worth more than a percentage of a four-figure award.
It also splits the bill. Costs before expiry of the relevant period stay on the standard basis; costs after it move to the indemnity basis. That division has to be drawn in the Bill itself, and a Bill that does not show it invites the paying party to assess the whole thing on the standard basis and say nothing about the distinction.
What 36.24 gives instead, in fixed costs
Where a fixed costs regime applies, rule 36.24 substitutes a formula for the assessment: additional costs equivalent to 35% of the difference between the fixed costs for the stage applicable when the relevant period expired and the stage applicable at the date of judgment.
The practical consequence is that timing drives value in a way it does not under 36.17. An offer made early and beaten at trial spans several stages and produces a real figure. An offer made shortly before judgment spans one, and 35% of a narrow difference is a small amount. Under 36.17 an early offer is also better, but the indemnity period simply runs longer; under 36.24 a late offer can be worth almost nothing.
The escape: when the court will not make the order
Both 36.17(3) and 36.17(4) are subject to the court concluding it would be unjust to make the order. Rule 36.17(5) requires the court to take into account all the circumstances including:
- the terms of any Part 36 offer;
- the stage in the proceedings when it was made, including how long before trial;
- the information available to the parties when it was made;
- the conduct of the parties as regards giving or refusing information needed to make or evaluate the offer; and
- whether the offer was a genuine attempt to settle the proceedings.
The last is the one to expect. An offer pitched at or very near the full pleaded value of a disrepair claim invites the argument that it was not a genuine attempt to settle but a device to trigger 36.17(4). The answer is on the file rather than in submissions: what the claim was worth when the offer was made, and what information the parties had at that point, which is factor (c) doing the work.
Acceptance within the relevant period
Most disrepair offers are accepted rather than beaten. Under CPR 36.13(1), where an offer is accepted within the relevant period the claimant is entitled to the costs of the proceedings, including recoverable pre-action costs, up to the date notice of acceptance was served. The relevant period is 21 days unless a longer one was specified.
The words in parentheses matter in disrepair, where a great deal of the work is done before anything is issued. They are also the reason the protocol position needs to be right from the start — see pre-action costs in housing disrepair.
Where this goes wrong on HDR files
- The regime is assumed rather than established. Claiming 36.17 consequences in a fixed costs case, or 36.24 in a standard basis case, undermines the rest of the bill.
- The Bill does not split at expiry of the relevant period, so the indemnity period is never actually assessed as one.
- The offer is treated as self-proving. Rule 36.17(5)(c) and (e) are decided on what was known and what the claim was worth at the time, and that is a contemporaneous question.
- Settlement below the offer is read as a small claims outcome. The figure is not the test — see Smith v Wigan.
Checklist when a Part 36 offer is beaten
- Is the claim on the standard basis or in fixed costs? Establish it before drafting.
- What was the relevant period, and on what date did it expire?
- Does the Bill divide at that date, standard basis before and indemnity after?
- Is the sum awarded identified for the 36.17(4)(a) and (d) calculations?
- In a fixed costs case, which stage applied at expiry and which at judgment? That difference is the whole of the 36.24 entitlement.
- What does the file show about the value of the claim and the information available when the offer was made?
Part 36 is the one mechanism in a disrepair claim capable of moving a bill from a proportionality argument into an assessment where proportionality does not apply. It is worth getting the regime right before anything else is argued.