Settlement offers are common at all stages of a dispute. “Without prejudice” offers are often made when proceedings are anticipated (but not yet commenced), and formal offers under the Uniform Civil Procedure Rules 1999 (Qld) (the UCPR) can be made at any point when proceedings are on foot (including during the course of a trial).
But what is the difference between a “without prejudice save as to costs” offer (commonly known as a Calderbank offer), and formal offer made pursuant to Chapter 9, Part 5 of the UCPR?
A Calderbank offer is made “without prejudice save as to costs.” This means that the offer does not prejudice a party to a proceeding (or anticipated proceeding), and cannot be used as evidence. However, if the case proceeds to trial and a judgment is given by a court, the Calderbank offer can be relied on regarding the question of legal costs. For example, if you offer the other party a certain sum of money, and they receive less than this sum at judgment, you can rely on the Calderbank offer in an argument that the other party should pay your costs.
Other requirements of Calderbank offers are that the offer should be open for a reasonable period of time for acceptance and include reasons why the other party should accept the offer. This is because, if you later rely on the Calderbank offer in an application for costs, you must demonstrate to the court why the other party’s rejection of your offer was unreasonable.
UCPR offers are different from Calderbank offers; particularly as there are different rules for Plaintiffs and Defendants.
If a Plaintiff makes a UCPR offer and receives a more favourable outcome at trial, the Defendant must pay the Plaintiff’s costs on an indemnity basis, unless the Defendant can show why this should not be the case. Conversely, if a Defendant makes an offer and receives a more favourable outcome at trial, the Defendant must still pay the Plaintiff’s costs on a standard basis until the date of the offer, with the Plaintiff paying the Defendant’s costs on a standard basis only from the date of the offer.
Therefore, if you are a Plaintiff in a proceeding, a UCPR offer may be a wise strategy to protect your costs position.
Making and Receiving Offers
If you receive an offer of settlement or wish to make an offer, particularly before proceedings are commenced, we recommend seeking legal advice immediately. If you receive a Calderbank offer before proceedings are commenced, you will need to assess whether or not your rejection of the offer would be unreasonable.
If proceedings have been commenced, you should consider making a UCPR offer to protect your costs position (particularly as a Plaintiff).
Please contact our office if you require legal advice regarding offers of settlement.
Article written by Andrew Herzig of our Brisbane office.