Pending Application can be dealt with despite Part 36 acceptance
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The decision in Rigley v Zurich Insurance Co (UK) Ltd, 2026 WL 00992487 (2026) saw the court consider whether it could address a pending application for reassignment of complexity band where a Part 36 offer had been made and accepted. It raises some interesting procedural points.
The key points are:
A. CPR 36.14(5)(b) explicitly preserves the court’s power to deal with any question of costs (including interest on costs) even after a stay arising from acceptance of a Part 36 offer. Specifically it will not “affect the power of the court - to deal with any questions of costs (including interest on costs) relating to the proceedings”. This opens the door to the court dealing with a multitude of costs issues beyond merely fixed costs points.
B. It’s likely that any application made after acceptance would not be dealt with in the same way and this principle will only extend to where the application is made pre-acceptance.
C. The court retains discretion on Complexity Band assignment. A claim which can be dealt with at trial within one day will appear suitable for Complexity Band 1 on Intermediate Track though it is open to the court to hold otherwise. Here it was held that the case fit the criteria for Complexity Band 1.
D. It means that in spite of a Part 36 offer and acceptance costs issues may still be resolved and as a consequence it may deprive parties of certainty over what is to be paid and received. Parties should be mindful therefore of any pending applications at the point an offer of settlement is made and if appropriate/possible seek agreement upon any outstanding issues before acceptance.
Case Details
Here the claim had been allocated to Intermediate Track and assigned Complexity Band 2. The Defendant applied for reconsideration of this decision and reassignment to Complexity Band 1. This is a significant decision on costs as depending on the Complexity Band (1 through 4) depends upon the level of Fixed Recoverable Costs.
The Defendant's position was that the claim was a Personal Injury case that could be dealt with in less than a day, liability was not in dispute and quantum was dispute. The Judge's view was that "on the face of it that sits within complexity band 1". The court recognised "that does not mean to say that the court could not allocate it to a different band, as indeed the court did, allocated it to band 2, but the defendant was within its rights to challenge that and has challenged it and the application, I am satisfied, was made within seven days of the original order being received on 28 October, the application I think was made on 31 October."
The court here recognised that the court does retain discretion on assignment (the judge kept using the phrase allocation incorrectly).
Chronologically in the claim whilst the application was pending the Defendant made a Part 36 offer and this offer was accepted by the Claimant before the application for reconsideration of assignment was dealt with.
The Claimant's position was that by accepting the Defendants offer, the claim was stayed and the court no longer had jurisdiction.
The court held as follows:
"I reject that argument. A claim that is stayed is still extant and within the court’s jurisdiction and as long as the claim is in existence, stayed or otherwise, the court has a jurisdiction to look at the matter."
The court further rejected an argument that the offer was made under a specific fixed costs regime and that the Defendant could not go behind the same. The Claimant's position was the offer was made on complexity band 2, the offer didn't specify it was subject to determination of banding or the court considering the pending application.
The court considered this argument:
"5. However, attractive as the argument may be upon the face, I am afraid I am against the claimant’s advocate because of the provisions of CPR 36.14(5)(b) and Mr Richmond, I think, for the defence is right to point out that provision which says:
”Any stay arising under this rule will not affect the power of the court—to deal with any question of costs (including interest on costs) relating to the proceedings.”
6. Mr Richmond says you always have a discretion, judge, and in any event 36.14(5)(b) makes explicit that which is in question. I believe he is right. I think the court does have a discretion on costs and therefore I am prepared to set aside that part of the order putting the costs into band 2 and I am going to allocate the costs to band 1."
So in short the court has discretion and jurisdiction to hear a pending application where there is Part 36 offer and acceptance. This means the costs position isn't necessarily crystallised until any pending applications are dealt with. This deprives parties of certainty of prospective costs exposure.
On the other side it gives parties an opportunity to resolve any outstanding costs issues which could be an application to band upwards as well downwards. It could also in principle include any any live costs application beyond those simply within Fixed Recoverable Costs.
Should you have any queries arising from this article or upon costs generally then please do not hesitate to get in touch with our friendly team. Please e-mail info@carterburnett.co.ukor call 01482 534567 for a chat.