Judge can be told of date of first part 36 offer after preliminary issues trial

Defendants make early part 36 offers for many reasons, not just out of pessimism, High Court says

A claimant who wins a preliminary issues trial can tell the judge the date of the earliest part 36 offer made by the defendant in seeking its costs up to the date 21 days later, the High Court has ruled.

In dealing with what he called “a point of pure construction”, His Honour Judge Stephen Davies, sitting as a High Court judge, decided that the terms of an offer did not include the date and that, if the rule committee had wanted it to, it would have said so.

In Essendi UK Hotels 2 Ltd v London Property Company Ltd [2026] EWHC 2501 (TCC), he observed that, if the claimant could not tell him the date, it would not be able “even to invite the court to award costs over that period”.

The defendant submitted that this was, nonetheless, the effect of CPR 36.16 on its proper interpretation.

Rule 36.16(4)(a) permits the trial judge to be told “whether or not there are part 36 offers” but rule 36.16(4)(b) forbids the trial judge from being told “the terms of any such… offers”. Neither expressly says whether the trial judge can be told the date of such offers. The court was told the authorities were conflicting.

HHJ Davies said: “It should also however be said that this point is likely only to arise in complex and expensive litigation, such as the present, where the successful party at the first trial considers it worthwhile seeking a costs order up to the date of the first part 36 offer by the other side.

“The basis for inviting the court to make an order of this kind being the argument that, whatever impact the part 36 offer may have on the decision as to the costs after that date, it cannot sensibly have any impact on the costs incurred before that date.

“Accordingly, it is said, the successful party should have its costs up to that date by reference to the well-established general ‘pay as you go’ costs principle established by the CPR and authority.”

The judge ruled that, if the rule committee had made a deliberate decision that trial judges should not be told of the date of a part 36 offer, “it would have been very straightforward to have included that in express terms in the drafting of the amended rule”.

He added that the rule also did not deal expressly with the identity of the party making the offer, which equally would stymie a costs order.

A construction “which permits all information to be disclosed related to the fact that part 36 offers have been made, other than their terms” was more consistent with the overall purpose of, and wording used in, part 36 as a whole, HHJ Davies said.

“That is because the mischief against which the partial disclosure provisions in rule 36.16(4) are in my view intended to guard are, first, the vice that under the old rule even the existence of part 36 offers could not be disclosed and, second, the vice that judges might be influenced, even if only subconsciously, by the terms of an inclusive part 36 offer when proceeding to determine the substantive rights of the parties at the stage two trial. Disclosing the date of part 36 offers or the identity of their makers does not reveal the terms of any such offers.”

He said he was not convinced by the argument that knowing the date and identity of the offer’s maker may give a “shrewd judge” insight into that party’s views of the merits.

“That is because many defendants make early part 36 offers for many reasons, not all of which reflect a pessimism about their case. For example, they may make an early low part 36 offer in an attempt to test a claimant’s willingness to take the case all the way, or to avoid incurring irrecoverable costs if the case goes to trial, or because they are worried about liability but confident about quantum.

“Furthermore, the particular case under consideration is where the first trial has already happened, where the trial judge for the second trial may be told that a global offer has been made but not its terms.

“I fail to see what the trial judge could gain from knowing about when the global offer was made or, for that matter, who made it, which might cause them to speculate unjustifiably. By that stage it is likely that the trial judge will already have formed a pretty shrewd view of the parties from presiding over the stage one trial, which is likely to be far more illuminating than knowledge of the date or identity of any part 36 offer maker.”

Further, he presumed that judges generally did not speculate “based on some hunch about what a part 36 offer may say”, while judges could usually be trusted to decide cases fairly even if they were made aware of the terms of a part 36 offer.

“Finally, it seems to me that there is no compelling reason to conclude that the rule committee must have intended that the default position was that unless disclosure was expressly permitted it should not be permitted.”

HHJ Davies decided that he could be told the date of the first part 36 offer made by the defendant.

Martyn Naylor (instructed by CMS Cameron McKenna Nabarro Olswang) for the claimant. Nicholas Trompeter KC (instructed by Ronald Fletcher Baker) for the defendant.