• Michael McCulloch

What is a Calderbank Offer?

As you are most likely aware, the cost of proceeding with legal action can be costly, emotionally draining and lengthy. It is becoming more common for the parties now to settle their dispute prior to legal proceedings. One of the ways that this can be achieved is by making a Calderbank Offer.

What is a Calderbank Offer? A Calderbank offer is an offer from 1 party to another in attempt to resolve a dispute (or debt). The offer is derived from the landmark case of Calderbank v Calderbank [1975] 3 All ER 333 (“Calderbank v Calderbank”). This decision established the idea that where a successful party refuses to accept an earlier settlement offer from the unsucessful party, the rejection of the offer can be used as evidence when the Court considers costs.


Calderbank Offers Best Practice

A Calberbank Offer should generally be in writing and must contain several key elements including, but not limited to:


  • the offer being marked "without prejudice save as to costs"

  • the offer being made is sufficiently clear, precise and certain

  • there is a timeframe for acceptance and reasonable time given for acceptance

  • the offer is being made in accordance with the principles in the decision of Calderbank v Calderbank

  • the reasons for making the offer

  • why the offer is reasonable

Relying on a Calbderbank Offer

To rely on a Calberbank Offer, you must show that the other party unreasonably rejected the offer in which to settle if the matter were to progress to Court.


Summary

A Calderbank Offer can be a very powerful tool when negotiating and will often encourage the other party to make a genuine effort to settle and reach a compromise. In commercial legal disputes it is a tactic that can be considered to avoid costly legal action.


Disclaimer: This article is general information only and does not constitute legal advice and is not intended to be relied on in any way.



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