SQE1 Part 36 offers: what you must know and how it is tested

SQE1 Part 36 offers questions test whether an offer is a valid Part 36 offer and what costs and interest follow if it is accepted or beaten at trial. The rules are in CPR Part 36, a self-contained code. Read it with the wider Dispute Resolution guide.

SubjectDispute Resolution (FLK1)

Key lawCivil Procedure Rules, Part 36

Question typeSingle best answer, five options

The rules to apply

A Part 36 offer must be in writing, say that it is made under Part 36, specify a period of not less than 21 days within which, if the offer is accepted, the defendant will be liable for the claimant's costs (the relevant period), and say whether it relates to the whole claim, part of it or an issue, and whether it takes into account any counterclaim (r36.5). It can be made before or after proceedings begin. The trial judge is not told of it until liability and quantum are decided.

A Part 36 offer can be accepted at any time unless the offeror has withdrawn it, even after the relevant period has ended. If it is accepted within the relevant period the claimant recovers costs up to the date of acceptance. Late acceptance usually means the offeree pays the offeror's costs after the period ended. After the relevant period the offeror can withdraw or change the terms by written notice, without permission.

At trial, the consequences depend on who made the offer. If the claimant beats their own offer (a judgment at least as advantageous), r36.17(4) applies: interest on damages up to 10% above base rate, indemnity costs from the end of the relevant period, interest on those costs up to 10% above base rate, and an additional amount, a percentage of the damages awarded, subject to a cap. If the claimant fails to obtain a judgment more advantageous than a defendant's offer, the claimant usually pays the defendant's costs from the end of the relevant period and interest on those costs, but there is no additional amount. In each case the court may depart from these results if it would be unjust.

Traps examiners use

Treating any 'without prejudice' letter as Part 36. It must comply with r36.5.
Applying the claimant's enhanced consequences to a defendant's offer. They are for claimant offers only.
Saying acceptance is impossible after the relevant period. It is possible unless withdrawn.
Mixing up 'at least as advantageous' (claimant's own offer) with 'more advantageous' (defendant's offer).

Worked question 1

On 1 March, Rosa makes a valid Part 36 offer to accept £90,000 to settle her claim, with a 21 day relevant period. The defendant rejects it. At trial the judge awards Rosa £110,000. Which is correct?

A. Rosa recovers only standard costs because the offer was not accepted.
B. Rosa may recover indemnity costs and enhanced interest from the end of the relevant period, and an additional amount, unless it would be unjust.
C. Rosa recovers the same as she would have without the offer.
D. The defendant pays Rosa's costs only up to the date of the offer.
E. The judge may order only the additional amount, with no costs consequences.

Answer: B. Rosa's judgment of £110,000 is more advantageous than her offer to settle at £90,000, so r36.17(4) applies. The court makes the enhanced orders unless it considers them unjust. A and C ignore the rule, D is wrong on timing, and E is not how the rule works.

Worked question 2

Denton Ltd makes a valid Part 36 offer to pay Jo £50,000. Jo rejects it and goes to trial. The court awards Jo £48,000. What is the usual result?

A. Jo recovers all her costs because she won.
B. Jo recovers her costs to the end of the relevant period and pays Denton's costs after that, plus interest on those costs, unless unjust.
C. Jo pays Denton's costs from the start of the claim.
D. Jo gets an additional amount of 10%.
E. Jo's claim is dismissed.

Answer: B. Jo failed to beat the defendant's offer, so r36.17(3) applies. She pays the defendant's costs after the relevant period ended, with interest, unless the court thinks it unjust. D is wrong because the additional amount is for claimants who beat their own offers. C is wrong on timing.

Checklist before you move on

Is it in writing, expressed to be made under Part 36, with a relevant period of 21 days or more?
Who made it, claimant or defendant?
Has it been accepted, withdrawn or has the period expired?
Which sub-rule applies at trial: r36.17(3) or (4)?
Is there any ground to find it unjust?

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Questions

What is the relevant period in a Part 36 offer?

A period of not less than 21 days stated in the offer. If the offer is accepted within it, the defendant usually pays the claimant's costs up to the date of acceptance.

Can a Part 36 offer be accepted after the relevant period?

Yes, at any time unless the offeror has withdrawn it, although the costs consequences change. Special rules apply once trial has started.

Does the judge see Part 36 offers?

Not until liability and the amount of the claim have been decided, unless the offer concerns a split trial issue.

Sources: SRA: SQE1 Assessment Specification (from 1 September 2026); CPR Part 36; Civil Procedure Rules. Checked 10 November 2026.