Claimant fails to beat a defendant's Part 36 offer: costs consequences (CPR 36.17(1)(a) and (3))
Northfield Packaging Ltd sued Arden Logistics Ltd for £180,000 damages for breach of contract. On 3 March 2026 Arden served a written offer of £95,000 expressly made under Part 36, stating a relevant period of 21 days. Northfield did not accept it and the offer was never withdrawn or changed. After a trial in September 2026, the judge awarded Northfield £88,000 (inclusive of interest on the same basis as the offer). Northfield's director argues that, as it won the case and the award is close to the offer, the offer should make no difference to costs.
Which of the following best describes the order the court must make, unless it considers it unjust to do so?
Choose one answer to see the reasoning.
Worked answer
Correct answer A: Arden is entitled to its costs from the date on which the relevant period expired, together with interest on those costs.
THE RULE TO REMEMBER
If a claimant fails to beat a defendant's Part 36 offer by any amount, the court must, unless unjust, award the defendant its costs from expiry of the relevant period plus interest on those costs.
Claimant fails to beat a defendant's Part 36 offer: costs consequences (CPR 36.17(1)(a) and (3))
CPR 36.17(1)(a) applies where, on judgment being entered, a claimant fails to obtain a judgment more advantageous than a defendant's Part 36 offer. By CPR 36.17(2), "more advantageous" means better in money terms by any amount, however small. Northfield recovered £88,000 against an offer of £95,000, so it failed to beat the offer. CPR 36.17(3) then provides that the court must, unless it considers it unjust to do so, order that the defendant is entitled to (a) costs (including any recoverable pre-action costs) from the date on which the relevant period expired, and (b) interest on those costs. None of the CPR 36.17(7) exceptions applies, since the offer was not withdrawn or changed and was made long before trial.
Why B is wrong: Those enhanced consequences arise under CPR 36.17(4) only where a claimant beats its own Part 36 offer.
Why C is wrong: The defendant's costs run only from the date the relevant period expired under CPR 36.17(3)(a).
Why D is wrong: "More advantageous" means better by any amount, however small (CPR 36.17(2)), so no substantial difference is needed.
Why E is wrong: The additional amount in CPR 36.17(4)(d) is a claimant-only consequence and is not available to a defendant.
That's today's practice done. Another featured question tomorrow.
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