A time-limited offer is not capable of being a Part 36 offer although it can still be taken into account by the court when exercising its discretion as to costs generally under Part 44 of the Civil Procedure Rules.
In C v D, the claimant made an offer to the defendant to settle the proceedings on terms. The offer was said to be "open for 21 days from the date of the letter" and went on to state that the offer was intended to have the consequences set out in Part 36. It detailed the costs consequences set out in Part 36.14 if the offer was not accepted.
The offer was not accepted within the time limit specified. However, shortly before trial the defendant purported to accept it. The claimant contended that the offer was no longer open for acceptance and sought a declaration from the court to confirm this. The defendant argued that, as no notice of withdrawal had been served, the offer remained open for acceptance, that it had accepted it and therefore there was no need for a trial.
The court held that despite the references to Part 36, considering the construction of the offer letter, it was not capable of being a Part 36 offer because it was time-limited. To be valid, a Part 36 offer must remain open for acceptance until it is changed or withdrawn by the service of a notice of withdrawal. Accordingly, the offer was a valid, time-limited offer which had to be accepted within the specified time. If it was not accepted within that time, the offer came to an end and could not be accepted thereafter. It was an offer that the courts could take into account under the general discretion as to costs (Part 44), but it was not a Part 36 offer and did not have the Part 36 costs consequences. The defendant could not accept the offer as it was no longer available for acceptance but further, the claimant could not benefit from the costs consequences of Part 36.
Things to consider
When making a Part 36 offer, ensure it complies with the wording of Part 36.2. Do not make the offer time-limited in any way if the intention is that the Part 36 costs consequences should apply. To be a compliant Part 36 offer, the offer must be capable of being accepted until it is withdrawn. If you want to make a time-limited offer, do so on a "without prejudice save as to costs" (Calderbank) basis and not under Part 36.