Part 36 offer

A formal settlement offer with built-in cost consequences — though those consequences work very differently if your case is on the small claims track.

Can I make a Part 36 offer in a small claims case?

Yes, there is nothing stopping a party from making one, but the cost consequences that usually give Part 36 offers their force largely do not apply because of the small claims costs rule in CPR 27.14.

Will I be penalised for rejecting a Part 36 offer in a small claim?

Not in the same way as on other tracks. You generally will not face the other side's legal costs simply for not beating the offer, though the court retains some limited discretion over costs in cases of clearly unreasonable behaviour.

Is there any point making a Part 36 offer on the small claims track?

It can still be useful as a clear, time-limited settlement proposal that focuses both sides' minds, even without the usual costs leverage — but it is not a substitute for a realistic assessment of your case.

What is the difference between a Part 36 offer and a normal settlement offer?

A Part 36 offer follows a specific format and procedure set out in the rules, which is what triggers the formal consequences on tracks where they apply. An ordinary offer to settle can be made informally at any time and does not need to follow this format.

Does accepting a Part 36 offer end the case?

Yes, if a Part 36 offer is accepted within the relevant period, the claim is generally settled on those terms, subject to the specific terms of the offer and rule.

Small Claims · Glossary

A formal settlement offer with built-in cost consequences — though those consequences work very differently if your case is on the small claims track.

Last reviewed: August 2026

is a formal settlement offer made under Part 36 of the Civil Procedure Rules, designed to encourage early settlement by attaching cost and interest consequences to a party who fails to do better than the offer at trial.

Where this comes from

Civil Procedure Rules, Part 36

— the rules governing how Part 36 offers are made, accepted and their consequences.

Civil Procedure Rules, Part 27, rule 27.14

— the general restriction on recovering costs in small claims track cases.

How Part 36 is meant to work

In most civil litigation, a Part 36 offer is a powerful tool. If a defendant offers to settle for £5,000 and the claimant refuses, presses on to trial, and is awarded only £4,000, the claimant can face serious cost penalties for not accepting an offer that, with hindsight, they should have taken. The reverse applies if a claimant makes an offer the defendant rejects and then does worse than at trial.

The mechanism works because the normal rule in most tracks is that the losing party pays a significant share of the winning party's legal costs. Part 36 offers add extra consequences on top of that — such as enhanced interest, an uplift on damages, and indemnity costs — for not beating an offer that was reasonable at the time.

Why it works differently on the small claims track

The small claims track has its own costs rule, CPR 27.14, which generally prevents the winning party recovering their legal costs from the losing party at all, beyond limited fixed amounts such as court fees and a small allowance for loss of earnings attending the hearing. Because there are usually no substantial legal costs to shift in the first place, the main lever a Part 36 offer relies on — costs consequences — largely does not apply in small claims cases.

A Part 36 offer can still be made in a small claims case, and refusing a reasonable offer is not risk-free — a court can still take conduct, including unreasonable refusal to negotiate, into account in some limited costs decisions, and an offer can still be useful simply as a negotiating tool. But claimants and defendants on the small claims track should not expect the same cost-shifting consequences that make Part 36 significant on other tracks.

How it works in practice

A defendant in a £3,000 small claims dispute makes a Part 36 offer of £2,000. The claimant refuses and proceeds to a hearing, where the court awards £1,800 — less than the offer.

On the fast track or multi-track, this outcome would typically expose the claimant to paying the defendant's costs from the date the offer expired, plus other penalties. On the small claims track, because CPR 27.14 restricts costs recovery regardless of the outcome, the claimant does not face those same cost consequences simply for not beating the offer — though they have still recovered less than they would have if they had accepted it at the time.

• Assuming small claims Part 36 offers work like every other track.
• The headline cost-shifting risk that makes Part 36 significant elsewhere is largely absent on the small claims track.
• Ignoring a reasonable offer anyway.
• Even without the usual cost consequences, an offer that reflects a realistic assessment of your claim is still worth taking seriously — refusing it does not make the underlying case any stronger.
• Getting the formalities wrong.
• To have any of the effects the rules attach to it, a Part 36 offer needs to comply with specific requirements in CPR 36 — an informal settlement proposal is not the same thing.
• Overestimating the leverage an offer gives you.
• On the small claims track, a Part 36 offer is best understood as a structured negotiating tool rather than a serious costs threat.

How costs are actually awarded in small claims cases, and why Part 36's main lever does not apply.

What still needs to be prepared if an offer is not accepted and the case goes to a hearing.

Frequently asked questions

Sources & further reading

• Civil Procedure Rules, Part 36
• Civil Procedure Rules, Part 27 — small claims track

Received a settlement offer in your small claim?

Start My Claim helps you weigh an offer against what you are likely to recover at a hearing before you decide.

Last reviewed: August 2026.

References checked against the sources above as in force on 10 August 2026.

This page is explanatory only and is not legal advice. Start My Claim is self-service software, not a law firm — its tools help you build and run your own case.