Offers of settlement: Why you should think twice about Calderbank offers.

When you are involved in a dispute, it is more than likely that you will receive a settlement offer. This is where you need to carefully understand the kind of offer it is. Most offers state the words “without prejudice save as to costs” and that the offer is made pursuant to the principles established in Calderbank v Calderbank. This type of offer is known as a ‘Calderbank offer’.

When you receive a Calderbank offer, and you reject it, and if your case is unsuccessful, you may be liable to pay most of the other party’s legal costs.

Usually, the Calderbank offer is made prior to judgement in a dispute, or prior to legal proceedings commencing.

If the one receiving the offer rejects it and the case proceeds to judgement, the offering party may make a claim for or against costs if they can show that given the final result it was unreasonable for the offer to be rejected by the other party. For example, a successful party can claim for their costs to be paid on ‘ordinary’ basis (party/party costs) or ‘indemnity’ basis (includes all reasonably incurred costs).

Conversely, the unsuccessful party can refute payment of any costs if they made a reasonable offer.

It is therefore important to remember that when you receive a Calderbank offer be sure to seek legal advice and understand what the offer may mean for you.

Further, if the offer is reasonable, you should seriously consider whether or not it might be in your best interest to settle.

For any further information listed in this article please contact our office on (03) 9350 4440.

By Oguzhan Sheriff (Partner, RSG Lawyers)

Oguzhan has experience in a range of legal areas. He has mainly practiced in the areas of Conveyancing, Commercial & Corporate, Litigation, Wills & Estates, Family Law and Property Law. Having experience working at a suburban law firm, Oguzhan is well versed in dealing with a vast range of legal issues and clientele.