Offers to settle a civil dispute

A settlement offer should make its scope and procedural status clear. An ordinary commercial proposal and a compliant Part 36 offer can carry different consequences in England and Wales. ^[1]

Define the bargain precisely

Identify the claims covered, payment amount, interest, costs and any non-financial terms. State the proposed acceptance process and payment timing. If several parties or claims exist, explain whether the offer settles all of them or a defined part.

Ask which form of offer suits the dispute. Merely writing 'Part 36' or 'without prejudice' on a document does not guarantee the intended legal effect.

Assess the consequences before rejecting

Compare the proposal with the realistic trial outcomes, future spending and recovery prospects. Obtain advice on the relevant costs regime, including track-specific rules and any fixed recoverable costs. Do not assume Part 36 operates identically on the small-claims track.

Costs risks help evaluate the decision. Instalment settlements need clear default provisions where payment is deferred. Keep a dated offer log and communicate acceptance through the correct process, so negotiations do not produce uncertainty about whether a binding settlement was reached.

Identify which decision the offer asks you to make Read the proposed terms before concentrating on the headline sum. Determine whether the offer addresses the whole dispute, a particular invoice, liability only or a claim with a counterclaim. Identify who pays whom and what happens to interest, costs and any non-financial obligation. A figure described as inclusive may still leave uncertainty about the items included. Ask for clarification where necessary and preserve the response, so the decision is based on a defined bargain rather than different assumptions held by each side.

Consider the practical value of the proposal from the current stage of the case. Compare prompt payment with delayed recovery, and assess whether a promised action can actually be performed. If confidential information, equipment or a continuing business relationship matters, identify how the offer deals with it. A proposal can be financially attractive while leaving an important operational issue unresolved. Conversely, a non-monetary term may address the main concern even where the cash amount is lower than the original demand.

Check whether Part 36 is the intended procedure Part 36 is a specific procedural code with requirements for the offer's form and content. It addresses matters including the scope of the claim, counterclaims, interest and the relevant period, together with acceptance and costs consequences. Obtain advice on whether the proposed wording achieves the intended effect. A general compromise can still have legal significance without complying with Part 36, but it should not be assessed as though the special consequences necessarily follow from a heading alone. [1]

Confirm the applicable track and costs regime before relying on those consequences. CPR Part 27 excludes Part 36 for claims allocated to the small-claims track. Other cases may involve fixed recoverable costs or additional provisions affecting the analysis. Give the adviser the allocation order and current procedural position, including any approaching trial. This is especially relevant where an offer drafted before allocation is later reviewed against a different case timetable. Avoid copying a costs warning from another dispute without checking that it fits this one. ^[2]

Review the offer against realistic outcomes Prepare a short decision note identifying the evidence supporting the claim, the significant weaknesses and the further expense of continuing. Use a range of plausible outcomes where uncertainty is substantial, rather than assuming either complete success or total failure. Distinguish the amount a court might award from the net amount likely to be collected after expenditure. Ask how accepting now, accepting later or proceeding to judgment could affect costs in the relevant regime. The adviser should explain the comparison using the actual offer and circumstances.

Reassess when an important fact changes. A newly located agreement, an expert opinion or a debtor's insolvency may alter the commercial judgement even if the pleaded amount stays the same. Keep the reasons for the decision with the dated offer, particularly where someone else must approve the response. Rejecting an offer because it was unacceptable earlier does not answer whether it is sensible now. Equally, do not allow money already spent to become the sole reason for taking further risk that the current evidence does not justify.

Track acceptance, withdrawal and remaining obligations Maintain an offer log showing service dates, clarification requests, changes and the status of each proposal. Under Part 36, the relevant period and withdrawal are governed by distinct provisions; expiry of that period should not simply be treated as automatic disappearance of every offer. Check the wording and applicable rules before assuming an older proposal can no longer be accepted. If you wish to withdraw or change an offer, ask what formal step is required and preserve proof that it was completed. [1]

Before accepting, confirm authority and the precise version being accepted, including any necessary court approval. Use the required communication process and keep evidence of service or delivery. Then identify the payment and procedural actions that follow, rather than treating agreement in principle as completion. Where only part of the case settles, record the issues remaining and the directions still applicable. A well-managed offer process ends with a clear understanding of what has been agreed, what must be done and how the continuing proceedings, if any, will be handled.