Under the Civil Procedure Rules, offers and payments made by parties in the pretrial period in an attempt to encourage a settlement out of court. A Part 36 payment (formerly called payment into court) is made into the court; it can only be made once legal proceedings have started and only in respect of money claims. A Part 36 offer (formerly called a Calderbank letter or offer) can be made in the period before the start of proceedings or – in respect of nonmonetary claims – after proceedings have started. Both procedures place pressure on the other party to the litigation to settle.
In the case of a Part 36 payment, the other party is notified of the payment and that it may accept or reject the payment as a settlement. In the event of a rejection and the litigation proceeding to trial, the amount awarded is compared with the amount paid in. If the amount awarded is less than the sum previously paid into court, costs since the time of payment in will be awarded against the successful claimant. Part 36 offers have a similar purpose and effect in that the court will consider the contents of the offer when it considers the issue of costs, after finding liability and settling the amount of damages.