In a civil claim, the claimant made a Part 36 offer and the defendant rejects it; if the claimant then obtains a judgment equal to or better than the offer, what is the typical costs outcome?

• A. The defendant pays the claimants' costs on the standard basis
• B. Indemnity costs from the end of the relevant period
• C. The fees are fixed for the stage at date of judgment
• D. The court orders the claimant to pay a portion of the defendant's costs from Day 22

Answer: (B)

Part 36 offers are meant to encourage sensible settlements. If the claimant makes a Part 36 offer and the other side rejects it, but the claimant then achieves a judgment equal to or better than that offer, the usual outcome is that the other party must pay the claimant’s costs on an indemnity basis from the end of the relevant period (the expiry date of the offer, typically 21 days after service).

This reflects the penalty for not accepting a reasonable offer and winning a result at least as good at trial. Indemnity costs are broader and higher than standard costs, aiming to reimburse most of the claimant’s actual reasonable costs from that expiry date onward.

The other options don’t fit the standard rule: standard costs from the end of the period would be too favorable to the claimant, fixed fees at judgment don’t apply here, and ordering the claimant to pay the defendant’s costs would reverse the usual direction.