Part 36 Late Acceptance: When Does the CPR 36.17 Uplift Actually Apply?

A claimant makes a strong Part 36 offer. The relevant period expires and the defendant does not accept. Weeks or months later it changes position and accepts. Does that late acceptance mean the claimant automatically gets indemnity costs, enhanced interest and the Part 36 additional amount? Usually, no.

This is one of the most consequential distinctions in Part 36, and one of the most commonly collapsed. Late acceptance of an offer and obtaining a judgment that beats or matches a claimant’s Part 36 offer are different procedural events, governed by different rules. Late acceptance is dealt with by CPR 36.13. The enhanced consequences usually associated with a successful claimant offer — indemnity costs, enhanced interest and the additional amount of up to £75,000 — arise under CPR 36.17, following judgment.

For a firm preparing a Bill of Costs or negotiating costs after settlement, confusing the two cuts both ways: it can mean claiming an uplift the Rules do not provide, or missing a genuine entitlement that they do.

The quick answer

Where a defendant accepts a claimant’s Part 36 offer after the relevant period but before judgment, CPR 36.13 governs the costs position. There is no automatic uplift.

Where the case instead proceeds to judgment and the claimant obtains a result at least as advantageous as its own Part 36 offer, CPR 36.17(4) can trigger four consequences unless the court considers them unjust:

• enhanced interest on damages, at up to 10% above base rate;
• costs on the indemnity basis from expiry of the relevant period;
• interest on those costs, at up to 10% above base rate; and
• the additional amount under CPR 36.17(4)(d), capped at £75,000.

What is the Part 36 “relevant period”?

It is often described as “the 21-day period”, which is not always accurate. A Part 36 offer will ordinarily specify a period of not less than 21 days during which the defendant will be liable for the claimant’s costs if the offer is accepted, and the Rules make separate provision for longer agreed periods and for offers made close to trial.

For costs purposes, the file should record:

• the date the offer was made;
• the date it was served;
• the relevant period stated in the offer;
• the expiry date;
• whether the offer was ever withdrawn or varied;
• the acceptance date; and
• whether the case concluded by acceptance or by judgment.

That last point decides whether the analysis begins under CPR 36.13 or CPR 36.17. Everything else follows from it.

What happens when a defendant accepts a claimant’s offer late?

Assume a whole-claim offer accepted after the relevant period. Under CPR 36.13(4), where costs liability cannot be agreed, the court determines it. CPR 36.13(5) then provides that, unless the court considers it unjust:

• the claimant is awarded its costs up to expiry of the relevant period; and
• the offeree pays the offeror’s costs from expiry to acceptance.

Where the claimant made the offer and the defendant accepted late, the defendant is the offeree. It therefore remains responsible for the claimant’s costs through to acceptance.

Note what CPR 36.13 does not say. It does not say those post-expiry costs become indemnity costs. That silence is where CPR 36.17 gets wrongly imported into a settlement that never reached judgment.

CPR 36.13(6) does direct the court, when considering whether the ordinary order would be unjust, to take into account all the circumstances including the matters listed in CPR 36.17(5) — the terms and timing of the offer, the information available when it was made, the parties’ conduct in relation to the information needed to evaluate it, and whether the offer was a genuine attempt to settle. Those factors are borrowed. The indemnity-costs presumption is not.

Are indemnity costs automatic after late acceptance?

No.

The leading analysis remains Fitzpatrick Contractors Ltd v Tyco Fire and Integrated Solutions (UK) Ltd [2009] EWHC 274 (TCC), a decision of Coulson J.

What Fitzpatrick actually decided

The claimant offered to accept £10.25m on 24 January 2008. The relevant period expired on 14 February 2008. The defendant accepted on 14 January 2009 — very nearly eleven months late. The claimant argued that its costs from expiry should be assessed on the indemnity basis, by analogy with the enhanced consequences that follow a judgment beating a claimant’s offer.

The judge rejected an automatic presumption. Three strands of the reasoning are worth keeping:

• The late-acceptance rule contains no presumption in favour of indemnity costs, in contrast with the express provision made for the position following judgment. As the judgment puts it, “there is no rebuttable presumption expressed here”.
• Reading one in would discourage late settlement, because a defendant facing automatic indemnity costs on acceptance has a reason not to accept at all.
• The claim had been advanced at around £21m and settled at roughly half that, which would itself have borne on the costs recovered had the matter run to trial.

What the claimant did recover is the more useful half of the decision. Costs were assessed on the standard basis, but the court awarded interest at 1% above base rate on costs paid after expiry of the relevant period, together with a substantial interim payment on account. Late acceptance was not worth nothing — it was simply not worth the CPR 36.17 package.

A note on the rule numbers

Fitzpatrick was decided under the pre-2015 numbering, and anyone checking the judgment should be ready for that. The late-acceptance rule it discusses as CPR 36.10 is today’s CPR 36.13, and the judgment-consequences rule it discusses as CPR 36.14 is today’s CPR 36.17. The reasoning transferred to the renumbered rules; only the labels changed.

Standard basis remains the starting point

CPR 44.3 provides for assessment on the standard or the indemnity basis, and where an order does not specify, the default is the standard basis.

Indemnity costs can still be sought where conduct justifies them. But the argument has to be:

“The conduct justifies indemnity costs” — not “the offer was accepted late, therefore indemnity costs follow”.

Those are materially different propositions, and only one of them is arguable.

When does CPR 36.17 apply?

CPR 36.17 deals expressly with costs consequences following judgment. For a claimant’s offer it applies where the judgment against the defendant is at least as advantageous to the claimant as the proposals contained in that offer. Unless it would be unjust, four consequences then follow.

1. Enhanced interest on damages

Interest on all or part of the sum awarded, at a rate of up to 10% above base rate, for some or all of the period from expiry of the relevant period.

2. Indemnity costs

Costs from expiry of the relevant period on the indemnity basis. That matters because proportionality does not bite in the same way as on the standard basis, and doubts about reasonableness are resolved in the receiving party’s favour rather than the paying party’s.

The rates claimed still have to be defensible either way — see our guide to the 2026 Guideline Hourly Rates for how grade and location arguments run on assessment.

3. Interest on costs

Interest on those costs, again at a rate not exceeding 10% above base rate.

4. The additional amount

This is the figure loosely called the “10% Part 36 uplift”. For a money award it is:

It is worth calling it what the rule calls it — an additional amount. It is not a late-acceptance penalty, and describing it as one in correspondence invites the paying party to point out that it has not been earned.

Late acceptance and judgment, side by side

Three worked examples

1. The defendant accepts the claimant’s offer late

A claimant offers to accept £100,000. The relevant period expires. The defendant accepts six weeks later, before trial.

On a whole-claim offer in a case outside fixed costs, the ordinary CPR 36.13 position is that the claimant recovers its costs to expiry and, as the late-accepting offeree, the defendant pays the claimant’s costs from expiry to acceptance.

What the claimant does not automatically get:

• an additional £10,000;
• indemnity costs;
• 10% above base on damages; or
• 10% above base on costs.

The matter concluded by acceptance, not by a judgment engaging CPR 36.17(1)(b). If separate conduct justifies indemnity costs or an interest order, that needs its own basis and its own evidence.

2. The claimant beats its offer at judgment

Same £100,000 offer, but it expires, the defendant rejects it, the case runs to trial and the claimant obtains judgment for £110,000.

The judgment is more advantageous than the offer, so subject to the “unjust” test CPR 36.17(4) is engaged:

• indemnity costs from expiry;
• enhanced interest on the £110,000;
• enhanced interest on post-expiry costs; and
• an additional amount of £11,000, being 10% of the award.

3. A £750,000 judgment

Where the claimant beats its offer and obtains judgment for £750,000, the additional amount is:

• 10% of the first £500,000 = £50,000;
• 5% of the remaining £250,000 = £12,500;
• total = £62,500.

The £75,000 cap is reached at a judgment of £1m. Above that, the cap rather than the percentage controls the figure.

Can indemnity costs still be awarded after late acceptance?

Potentially, yes — but late acceptance is not the shortcut.

Fitzpatrick requires a claimant seeking indemnity costs after pre-judgment late acceptance to establish a proper basis for that order rather than importing the CPR 36.17 presumption. The court’s wider discretion under CPR 44 takes in the parties’ conduct, the way the litigation has been pursued and the other circumstances of the case.

Evidence that may carry weight includes:

• unreasonable refusal to engage with the offer;
• procedural conduct generating unnecessary costs;
• failure to provide information needed to evaluate the offer;
• the stage at which the offer was made;
• the information available when it was made; and
• whether the offer was a genuine attempt to settle.

And it is worth remembering that Fitzpatrick itself produced an interest award on post-expiry costs. A claimant with a strong late-acceptance file should be arguing for something, even where the indemnity basis is out of reach.

What if the claimant accepts the defendant’s offer late?

The same rule produces the opposite risk.

Where a defendant’s whole-claim offer is accepted after expiry, CPR 36.13(5) gives the claimant its costs to expiry, and then the offeree pays the offeror’s costs to acceptance. Here the claimant is the offeree and the defendant is the offeror, so the claimant may be liable for the defendant’s post-expiry costs.

This is why Part 36 dates are not diary reminders. They are the point at which costs liability can change hands, and a file that cannot evidence exactly when the relevant period expired is a file that cannot argue about it.

Fixed recoverable costs run on a different track

Everything above concerns Section I of Part 36. Where the claim is subject to fixed recoverable costs under Section VI, VII or VIII of Part 45, Section II of Part 36 applies instead, and the analysis changes shape rather than degree.

There, acceptance after the relevant period is resolved by reference to the fixed costs for the stage applicable when the relevant period expired, rather than by an assessment of costs actually incurred. The enhancement following judgment is also different: instead of indemnity costs and a percentage of damages, it takes the form of 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 judgment.

So the first question on any Part 36 costs analysis is not “late or not”. It is whether the claim is in fixed costs at all — because that decides which half of Part 36 you are reading.

The settlement sum is normally due within 14 days

One Part 36 deadline gets overlooked once everyone turns to costs. Where an accepted offer involves a single sum of money, CPR 36.14 generally requires it to be paid within 14 days of acceptance, unless the parties agree otherwise in writing or the court orders otherwise. If it is not paid, the claimant may enter judgment for the unpaid sum without starting fresh proceedings.

That is a separate entitlement from the dispute about recoverable costs, and it does not wait for it.

What the Bill of Costs should show

The costs file should make the chronology obvious on its face. Retain:

• the Part 36 offer and proof of when it was made and served;
• the stated relevant period and the expiry date;
• any request for clarification, or any variation or withdrawal;
• confirmation that the offer remained open;
• the notice of acceptance and its date;
• any costs agreement, and any order dealing with the basis of costs;
• evidence supporting any application for indemnity costs; and
• time records split around expiry of the relevant period.

A Bill should not label a period “CPR 36.17 indemnity costs” where the case ended by late acceptance and there was no relevant judgment. Identify the order or rule that actually gives rise to the entitlement. A Bill that does this is far easier to defend when the Points of Dispute arrive.

Why the distinction matters at detailed assessment

Overclaiming Part 36 consequences is as damaging as missing them.

Assert an automatic indemnity basis or an additional amount where CPR 36.17 was never engaged, and the paying party has a free target in its Points of Dispute — and a reason to treat the rest of the Bill as equally optimistic. Equally, where judgment did engage CPR 36.17, failing to separate the post-expiry period and identify each enhancement leaves real recovery unclaimed.

A costs chronology should answer four questions immediately:

• Who made the offer?
• When did the relevant period expire?
• Did the matter conclude by acceptance or by judgment?
• Which order or rule determines the basis of costs?

Once those four are answered, most of the Part 36 costs analysis follows.

If damages have settled but costs have not

A Part 36 settlement does not mean the costs exercise is finished. Where recoverable costs remain disputed, the next step depends on the procedural position and any existing order.

For pre-issue matters where the substantive claim has settled and there is a written agreement to pay costs to be assessed if not agreed, our guide to CPR 46.14 costs-only proceedings and Part 8 explains when that route becomes relevant. Do not assume Part 8 is needed merely because Part 36 costs are disputed — in issued proceedings the court can deal with costs within the existing framework.

A checklist before you agree the costs

• Was the offer valid under CPR 36.5?
• Was it still open when it was accepted?
• What was the exact relevant period, and when did it expire?
• Who was the offeror and who was the offeree?
• Was acceptance actually late?
• Is the claim in fixed recoverable costs, and so under Section II?
• Did the case settle by acceptance, or proceed to judgment?
• If judgment was entered, did the claimant equal or beat its own offer?
• Is CPR 36.17 genuinely engaged?
• If indemnity costs are sought after acceptance, what conduct supports them?
• Have pre- and post-expiry costs been separated?
• Has any interest entitlement been identified — including the Fitzpatrick route?
• Has the additional amount been calculated only where the rule permits it?

Those checks belong before the Bill is finalised, not after a global figure has been accepted.

The point to remember

The shorthand “Part 36 accepted late = indemnity costs + 10% uplift” is unsafe. The question that actually decides it is:

Did the matter conclude by late acceptance under CPR 36.13, or did the claimant obtain a judgment engaging CPR 36.17?

That answer determines whether you are dealing with ordinary late-acceptance consequences or the considerably stronger package that follows judgment. The job then is to make sure the Bill reflects the correct period, basis and entitlement — without asserting an uplift the Rules do not provide, or leaving a genuine one unclaimed.

If you need a Bill, e-bill, Points of Dispute or Replies drawn on a file with a Part 36 chronology in it, see our costs drafting and recovery services, or send us the papers and we will review the costs position.

Sources: CPR Part 36 (offers to settle), in particular rules 36.5, 36.13, 36.14 and 36.17, and Section II for claims in fixed recoverable costs; CPR Part 44, in particular rule 44.3; and Fitzpatrick Contractors Ltd v Tyco Fire and Integrated Solutions (UK) Ltd [2009] EWHC 274 (TCC), Coulson J. Rule references are to the current numbering; Fitzpatrick was decided under the pre-2015 numbering, where the equivalent rules were CPR 36.10 and 36.14.