Changes to CPR Part 36 coming into force in April

The changes to CPR Part 36 coming into force in April 2021 could have a potentially expensive impact on late acceptance of Part 36 offers.

An additional paragraph at the end of CPR 36.5 is to be inserted, which reads:

  • “(5) A Part 36 offer to accept a sum of money may make provision for accrual of interest on such sum after the date specified in paragraph (4). If such an offer does not make any such provision, it shall be treated as inclusive of all interest up to the date of acceptance if it is later accepted.”

It is important to note that, if there is no provision included for interest to be accrued after the date of expiry of the offer, the default position is that the offer will be treated as inclusive of interest up until the date it is accepted.  Parties making Part 36 offers to accept a certain sum should therefore, as a matter of course, make provision for the accrual of interest from the date of expiry of the offer.

The change to Rule Part 36 effectively codifies the decision of the Court of Appeal in Calonne Construction Ltd v Dawnus Southern Ltd [2019] EWCA Civ 75 in which it was held that, in circumstances where the offer included provision for additional interest to be paid after the offer had expired, the settlement sum was inclusive of interest until the date of expiry, and thereafter interest at a rate of 8% per annum was to be added.

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