Late Acceptance of Part 36 Offers and Fixed Costs: Lessons from Attersley v UK Insurance Ltd [2026] EWCA Civ 217
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Case Authority
Court: Court of Appeal (England & Wales)
Case: Attersley v UK Insurance Ltd [2026] EWCA Civ 217
The Court of Appeal considered the costs consequences where a Claimant accepts a defendant’s Part 36 offer after the expiry of the relevant period in a claim that initially fell within a fixed recoverable costs regime. The court confirmed that, in certain circumstances, a claimant who accepts a Part 36 offer late may remain limited to the fixed costs that applied when the offer was made or when the relevant period expired, even where the claim later progresses outside that regime. The decision provides important guidance for litigators dealing with the interaction between Part 36 settlement strategy and fixed recoverable costs.
Introduction
Part 36 offers remain one of the most powerful strategic tools available in civil litigation. The Court of Appeal’s decision in Attersley v UK Insurance Ltd highlights the potential consequences where a claimant accepts a defendant’s offer after the expiry of the relevant period, particularly where the claim initially fell within a fixed recoverable costs regime. For defendants, insurers and other paying parties, the judgment demonstrates how early Part 36 offers can significantly restrict recoverable costs if acceptance is delayed. Solicitors and insurers frequently instruct paying party costs lawyers to analyse the costs consequences of late Part 36 acceptance and to challenge bills of costs during detailed assessment.
See our guide to paying party detailed assessment strategy: https://www.sphcosts.com/excessive-costs
The Role of Part 36 in Costs Strategy
Part 36 of the Civil Procedure Rules provides a structured framework designed to encourage settlement. Offers made under the rule carry significant costs consequences depending on when they are accepted. Where a claimant accepts a defendant’s Part 36 offer within the relevant period, the defendant typically becomes liable for the claimant’s costs up to the date of acceptance. However, if the claimant accepts the offer after that period has expired, the court has discretion to determine the appropriate order for costs after that date. In many cases this discretion becomes particularly significant where fixed recoverable costs regimes apply. Paying parties frequently rely on specialist advice when challenging a bill of costs at detailed assessment.
See: https://www.sphcosts.com/post/how-paying-parties-challenge-a-bill-of-costs-at-detailed-assessment
Interaction Between Part 36 and Fixed Costs
Fixed recoverable costs regimes are intended to provide certainty and predictability in certain categories of litigation. Where a claim falls within a fixed costs framework, recoverable costs are capped at prescribed amounts depending on the procedural stage reached.
The Court of Appeal in Attersley highlighted an important point: the costs consequences of late acceptance of a Part 36 offer may be determined by the fixed costs position that existed when the offer was made or when the relevant period expired.
Later developments in the litigation, such as allocation to a different track or increased complexity, do not necessarily displace the earlier fixed costs framework.
For a practical overview of how the intermediate track fixed recoverable costs regime operates, see:https://www.sphcosts.com/post/intermediate-track-fixed-recoverable-costs
Why Late Acceptance Can Restrict Recoverable Costs
The reasoning behind this approach is rooted in the structure of Part 36 and the objective of promoting early settlement. A defendant who makes an early settlement offer should be able to assess the potential costs consequences of that offer with a degree of certainty. Allowing later procedural developments to alter those consequences could undermine the predictability of the rule. Where a claimant delays acceptance of a reasonable offer, the court may determine that the costs consequences should reflect the procedural and costs position that existed when the offer should reasonably have been accepted.
Strategic Lessons for Paying Parties
The decision provides several important practical lessons for defendants and insurers.
Early Part 36 Offers Can Limit Costs Exposure
Making a well-judged Part 36 offer at an early stage of litigation can significantly reduce the potential costs exposure faced by a defendant. Where the offer is accepted late, the costs position may remain anchored to the earlier fixed costs framework rather than the more expensive regime that might apply later in the case.
Late Acceptance Does Not Automatically Increase Costs Liability
Claimants sometimes assume that if a case later leaves the fixed costs regime, the defendant’s costs exposure will automatically increase. The Court of Appeal decision demonstrates that such an assumption may be incorrect. The court may conclude that the claimant’s delay in accepting the offer means that the earlier fixed costs framework continues to govern the costs outcome. Settlement Timing Matters. A claimant who delays acceptance of a reasonable Part 36 offer risks losing the opportunity to recover higher costs that might otherwise have been available later in the litigation.
Implications for Detailed Assessment
Although fixed costs regimes are intended to avoid detailed assessment in many cases, disputes still arise regarding:
• whether the claim falls within a fixed costs regime
• the stage reached when an offer was accepted
• the correct interpretation of the relevant Part 36 rules.
In those circumstances, paying parties frequently prepare Points of Dispute for paying parties challenging the recoverability of costs claimed. See: https://www.sphcosts.com/pod
Fixed Costs and the Expanding Civil Litigation Landscape
The significance of these issues has increased following reforms expanding the scope of fixed recoverable costs in civil litigation.
As fixed costs regimes apply to a wider range of claims, disputes concerning the interaction between Part 36 offers and fixed costs are likely to become more common.
For a breakdown of the intermediate track fixed recoverable costs tables, see: https://www.sphcosts.com/post/intermediate-track-costs-table
Conclusion
Late acceptance of a Part 36 offer can have significant consequences for the recovery of litigation costs. In particular, where fixed costs regimes apply, a claimant may find that the recoverable costs remain limited to the framework that existed when the offer was made or when the relevant period expired. For paying parties, the decision highlights the continuing importance of early settlement strategy, careful use of Part 36 offers, and structured analysis of costs claims. These issues frequently arise during detailed assessment costs disputes, particularly where parties disagree about the applicable costs regime or the effect of late acceptance.
