The short version is that if someone offers a settlement and you refuse it, and the case goes to trial and you either lose, or win but don't win as much as was offered in the settlement, you owe costs from the date that the settlement offer was made, and you owe them at what's called the "indemnity basis" - ie, you have to pay more. This means that there's a strong incentive to make a settlement offer early in the proceedings. If the other side refuses, they'll likely end up owing you more.

But obviously it's important that the judge makes a decision without knowing about what offers have been made and refused and what they involved, because that might otherwise prejudice their decision making process - so 36.16 makes it clear that disclosing the existence of any offers before judgement is entered is forbidden

But settlements still make sense in terms of saving everyone time and money, and it's not unusual for them to occur immediately before the trial, or even *during* the trial. Someone being willing to offer a settlement isn't admitting they have a weak case, and in general if you were offered a settlement, refuse it, go to trial and then lose, you've made some poor choices.