Insurer’s early Part 36 offer before allocation to multi-track gives it the protection of fixed costs

In Laura Attersley v UK Insurance Ltd [2026] Civ 217 the Claimant sought damages arising from a road traffic accident.  A low value road traffic accident portal claim was made initially and later proceedings pursued for a higher sum of £150,000.  In March 2021 the Defendant admitted liability and made an ‘early’ part 36 offer in the sum of £45,000.  In January 2022, after expiry of the 21 day relevant period of the offer, the matter was allocated to the multi-track.  In July 2022 the Claimant accepted the offer ‘late’, after allocation to the multi-track.  The question was whether costs should be fixed or on the standard basis.

The difference was not insignificant – profit costs if fixed would be £10,610 plus VAT excluding disbursements.  If conventionally assessed (not fixed), those profits costs were claimed at £56,744 excluding disbursements, over 5 times the ‘fixed’ amount. 

The Claimant argued that upon allocation to the multi-track, fixed costs are completely disapplied, with retrospective effect and for all purposes.

The Defendant argued that the Claimant should be limited to fixed recoverable costs only, as the offer expired before allocation to the multi-track. 

The Court of Appeal found that the Defendant was limited to recovery of fixed costs only. 

It underlines the need for astute advice quickly upon a part 36 offer being made.  The relevant period (which must be not less than 21 days after the offer is made) provides a time to make whatever enquiries and to gather whatever evidence is desirable in order to consider the offer.  Speed and the right considerations are key in considering an offer as soon as it is made.  Delaying and waiting for later developments may come at a cost.