Calderbank Offer

A Calderbank offer is a settlement proposal made under the principle of “without prejudice save as to costs.”

This strategy aims to resolve a dispute by proposing a lower settlement amount, thereby averting the need for a court trial. It serves as a warning to the other party that if the matter proceeds to court and the outcome is less favourable than the Calderbank offer, the offering party may be entitled to recover higher court costs. Additionally, the fact that such an offer has been made may influence the court’s decision on costs.

Key elements of a Calderbank offer include:

1. It must remain open for acceptance for a period of 21 days.
2. If accepted within 21 days, it should offer to cover the reasonable costs incurred by the other party up to that point. Subsequently, acceptance may be subject to the offeror’s costs incurred after the 21-day period.
3. It should specify the terms regarding interest, typically including interest in the offer.
4. It should clarify whether any counterclaim is considered in the offer.

The term “Calderbank offer” originates from the case Calderbank v. Calderbank in 1975. In this case, Mrs. Calderbank demonstrated a willingness to settle the dispute before proceeding to court. Had Mr. Calderbank accepted her offer prior to the trial, he would have been in a more favourable position, as the trial outcome was less advantageous to him than Mrs. Calderbank’s earlier offer. As a result, neither party would have had to go to court. The court ruled that Mrs. Calderbank was entitled to her costs from the date she expressed her willingness to settle.

A Calderbank offer serves as an alternative to a Part 36 offer, which is a written proposal to settle with a minimum acceptance period of 21 days. If not accepted within the specified period and the other party fails to surpass the offer, there may be cost implications.