Insurers who make timely settlement offers cannot be forced into higher costs when claimants sit on those offers, the Court of Appeal has ruled.
In a unanimous decision handed down on March 4, 2026, the court sided with UK Insurance Limited in a dispute over who picks up the legal bill after a claimant sat on a settlement offer for over 15 months before accepting it.
The case, Attersley v UK Insurance Limited [2026] EWCA Civ 217, traces back to a road traffic accident in March 2018. Laura Attersley was driving when a vehicle insured by UK Insurance Limited turned across her path and collided with her car. She initially filed a claim under the Pre-Action Protocol for Low Value Personal Injury Claims, putting the value at up to £10,000 for soft tissue, whiplash and other injuries.
The picture shifted. After the insurer disputed liability and the claim left the Protocol, Attersley's solicitors issued court proceedings in February 2021, this time seeking up to £150,000 for ongoing physical and psychological issues.
UK Insurance Limited admitted liability and, on the same day the defence was filed, put a Part 36 offer of £45,000 on the table. Attersley did not accept within the standard 21-day window. The case was allocated to the multi-track in January 2022, with directions for ten experts between the parties and a five-day trial. Only in July 2022 did Attersley accept the offer.
Then came the real fight: costs. Attersley argued that because the case had moved to the multi-track before she accepted, the fixed costs regime no longer applied, and she should receive her costs assessed on the standard basis - a substantially larger sum. UK Insurance Limited disagreed, saying fixed costs should hold because that was the regime in place when the 21-day window closed.
The Court of Appeal agreed with the insurer. Lord Justice Miles, with Lady Justice Falk and Lord Justice Lewison, held that the costs consequences of accepting a Part 36 offer are determined by the regime in place when the offer deadline expires - not by what happens afterwards. Multi-track allocation months later does not rewrite the costs picture retroactively.
The decision overturned the High Court ruling by Mrs Justice Stacey and restored the original county court order.
For insurers, the message is straightforward: a well-timed Part 36 offer locks in costs protection at the point the offer window closes. Claimants who wait cannot upgrade their costs entitlement by relying on later procedural developments.
There is a footnote worth watching. The court acknowledged that the rules do not clearly address every scenario - particularly where a Part 36 offer is made after multi-track allocation, or where allocation happens during the offer window - and invited the Rules Committee to clarify. Any changes that follow could reshape how insurers approach settlement timing in these cases.
