Form N242 UK: Notice of Payment Into Court Explained

At a glance

• What N242 does: records that a party has paid a sum of money into court because a court order required it, and confirms the payment is not intended to satisfy the claim — CPR rule 37.1.
• Not the same as a Part 36 offer: since the current version of Part 36 took effect, a Part 36 settlement offer under rule 36.5 is simply a written offer. It does not itself require any money to be paid into court.
• Its sister form: N242A is used to make, or accept, a Part 36 offer to settle — a different document for a different purpose, not an alternative version of N242.
• Where the money goes: to the Court Funds Office, together with a completed Court Funds Office form 100 and a sealed copy of the order — never to the court that made the order.
• Getting money back out: requires the court's permission under rule 37.3, except in the narrow case where a defendant agrees that money already in court should be used to satisfy an accepted Part 36 offer.
• No bank account? A litigant in person without a current account can, in county court or District Registry proceedings, pay in cash at the court itself instead of using the Court Funds Office (Practice Direction 37, paragraph 1.2).

This guide covers England and Wales.

What Form N242 is (and what it is not)

Form N242 is the notice used when a party has been ordered by the court to pay a sum of money into court, and that party does not want the payment treated as settling any part of the claim. The underlying rule is short: CPR rule 37.1 simply requires that a party paying money into court under a court order must serve notice of the payment on every other party, and file a certificate of service confirming that it has been served.

The whole of Part 37 is deliberately narrow. It was substituted in its current, shorter form by the Civil Procedure (Amendment No.3) Rules 2006, with effect from 6 April 2007, as part of the same reform that rewrote Part 36. Before that date, the pre-2007 version of Part 36 itself involved paying money into court to protect a defendant's costs position. That is no longer how a Part 36 offer works. Today, Part 37 deals only with money paid in because a court order required it (rule 37.1), money paid in to support a defence of tender before claim (rule 37.2), the mechanics of paying that money out again (rule 37.3), and payments into court under other enactments (rule 37.4).

If you are dealing with a genuine settlement negotiation rather than a specific court order, you are very likely in Part 36 territory, not Part 37 — see Form N242A instead.

When does a court actually order a payment into court?

A court order requiring a payment into court is not automatic — it has to come from somewhere. Two routes appear directly in the Civil Procedure Rules:

• A conditional order. Under CPR rule 3.1(3), the court can make an order subject to conditions, and one of the conditions it can attach is a requirement to pay a specified sum into court, together with a stated consequence if that condition is not met.
• A sanction for non-compliance. Under CPR rule 3.1(5), the court can order a party to pay a sum into court where that party has, without good reason, failed to comply with a rule, practice direction, or a relevant pre-action protocol. When deciding how much, the court must have regard to the amount in dispute and the costs the parties have incurred or may incur.
• A defence of tender before claim. Separately, under rule 37.2, a defendant who wants to rely on a defence that they already tendered the sum owed before the claim was issued must pay that amount into court — if they do not, the defence is not available to them until they do.

In each of these, the payment exists because of something the court (or the rules) has specifically required — not because a party has chosen, of its own accord, to offer money to settle.

N242 vs N242A: how to tell which one you need

The confusion between these two forms is understandable, because both concern money connected to a court claim. The test is what triggered the payment:

• If a court order has told you to pay a sum into court, and you do not want that payment to be treated as satisfying the claim — that is Form N242.
• If you want to make, or accept, an offer to settle the claim (or part of it) under Part 36 — that is Form N242A, and no payment into court is needed to make the offer itself.

The N242 form itself still carries a footnote referring readers to N242A for "payment in satisfaction," which reflects how Part 36 worked before the 2007 reform. GOV.UK's current title for N242A is "Notice of offer to settle (Section 1 — Part 36) including notice of acceptance," which better reflects modern practice: Part 36 is now about a written offer, not a deposit.

How to complete and send Form N242

1. Confirm the order requires it. Check the wording of the court order carefully. Form N242 only applies where the order requires a payment into court and you do not intend the payment to satisfy the claim.
2. Gather the claim details. You will need the claim number, the full names of the claimant and defendant, and any solicitor references. Have the sealed copy of the order to hand — a copy of it must go with the payment.
3. Complete Court Funds Office form 100. Practice Direction 37, paragraph 1.1 requires the payment, a sealed copy of the order (or a copy of the defence, for tender before claim), and a completed Court Funds Office form 100 to be sent together to the Court Funds Office.
4. Send it to the Court Funds Office — not the court. The Court Funds Office handles money held by the courts centrally; sending funds to the court that made the order is very likely to cause delay or rejection. Check the Court Funds Office's current postal address on GOV.UK before sending anything, as HMCTS addresses do change.
5. No bank account? A litigant in person without a current account, in a claim proceeding in a county court or District Registry, can instead lodge the payment in cash directly with the court, together with a completed form 100 (PD 37, paragraph 1.2).
6. Serve and file. A copy of the completed form 100 must be served on every other party, and a copy of it — together with a certificate of service confirming that service — must be filed at the court dealing with the claim. Form N242 is the document that carries this notice.

What happens to the money after it is paid in

Money paid into court under an order, or in support of a defence of tender before claim, does not sit there waiting to be claimed by whoever asks first. Under CPR rule 37.3, it cannot be paid out without the court's permission, with one narrow exception: where a Part 36 offer has been accepted without needing the court's permission, and the defendant agrees that a sum already paid into court should be used (in whole or in part) to satisfy that offer.

Where the court's permission is needed, Practice Direction 37 sets out the mechanics: an application under Part 23, stating the grounds relied on and supported by evidence where necessary. Where permission is not needed — because the parties have agreed the money in court should satisfy an accepted Part 36 offer — the party asking to be paid instead files a request for payment (Court Funds Office form 201), together with a statement that the defendant agrees to the payment (Court Funds Office form 202).

Common mistakes to avoid

• Sending the payment to the court, not the Court Funds Office. This is the single most common practical error and typically causes delay while the payment is redirected.
• Treating N242 as a settlement mechanism. It isn't one. If you actually want to make a settlement offer, use Form N242A — no payment into court is required to make a Part 36 offer.
• Assuming the money can be withdrawn on request. Once money is paid into court under an order, getting it out again generally needs a court application, not a simple request.
• Forgetting the certificate of service. Filing Form N242 without also filing a certificate confirming it was served on every other party does not satisfy rule 37.1.

If you are unsure whether your court order actually requires a payment into court, or whether N242 or N242A fits your situation, it is worth talking it through before you send any money — the consequences of using the wrong route are easier to avoid than to unwind.

This guide provides general information about Form N242 and payments into court in England and Wales. It is not legal advice and is not a substitute for advice tailored to your specific circumstances. The law described was accurate as at August 2026 and is subject to change — always check GOV.UK and legislation.gov.uk for the most current position, including the current Court Funds Office address before sending any payment.

Last reviewed: August 2026 · Next review due: August 2027 or on legislative change.