Unfair Dismissal in Australia
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Essential Elements of a Calderbank Offer
- Published September 27, 2019
Table of Contents
A “Calderbank” offer is a certain type of settlement offer. Often multiple settlement offers are made by both plaintiffs and defendants during the course or proceedings. A settlement offer, other than having the benefit of potentially settling a dispute, also has the benefit of attempting to protect your legal costs.
A Calderbank offer is derived from an old English Court of Appeal case “Calderbank v Calderbank”. In that case, the wife made a reasonable offer to settle the dispute. The husband rejected the offer, and the wife ended up with a better result at court. The judge considered that the husband was unreasonable by rejecting the offer.
Calderbank offers are now accepted in almost all disputes in Australia, but usually not in criminal proceedings.
This article provides some ‘elements’ and ‘rules’ about Calderbank offers. We use these terms loosely, because failing an element may not necessarily cause a Calderbank offer to be ineffective, however, failing to follow the elements and rules will jeopardise the validity of a Calderbank offer and should be adhered to whenever possible.
Overall Requirement
The failure to accept a Calderbank offer will almost always be considered by the courts when deciding whether to order indemnity costs.1
The refusal to accept an offer does not automatically result in an award of indemnity costs. The legal basis for an award of indemnity costs is when the rejection of the offer was unreasonable or imprudent.2 All of the circumstances must therefore be taken into consideration. It is for the party seeking indemnity costs to show that the other party acted “unreasonably or imprudently” in not accepting the Calderbank offer.3
This means that, for example, if the plaintiff wants indemnity costs from the defendant, it will need to show that the defendant’s rejection of the plaintiffs offer was unreasonable or imprudent. Following these ‘elements’ should assist a party in being able to demonstrate whether the rejection was unreasonable or imprudent.
Main Elements
The following rules and elements should assist in drafting an effective Calderbank offer:
- Give the person sufficient information to know the relevant facts in the proceedings, and so that they can appreciate the difficulties in their case;4
- Ensure that there is sufficient time to consider and accept the offer. A single day is unlikely to be enough, we usually recommend 7 days for relatively simple matters and 14 days for complex matters from when the other party receives the offer. If there is a long weekend or Christmas holidays, consider extending the offer to at least 5 to 10 working days.5
- Make a compelling offer. Usually an offer will need to be less than what the court orders. For example, if you determine you will win $100,000 at trial, then you will want to make your offer less than $100,000. Sometimes it is difficult to predict what the court will offer, so this is possibly the most difficult element to fulfiil;6 and
- Ensure that the offer outlines clear and unambiguous terms.7
Best Practice
Where possible, try to:
- Place at the top of the correspondence “Without prejudice, save as to costs“;
- Include on the letter the date you send the correspondence;
- Tell the other party that you will rely on the offer for indemnity costs;8
- Try to keep the Calderbank offer quantifiable in monetary terms (avoid public apologies for example);9
- Do not include legal costs where possible, or otherwise fix legal costs;10
- Make offers as often as possible throughout the proceedings;
- State that the offer is pursuant to the terms in Calderbank v Calderbank [1976] Fam 93;
- Don’t include multiple plaintiffs in the same Calderbank offer unless they can properly assess each claim and not be disadvantaged from accepting the offer because of the inclusion of other plaintiffs;11
- Don’t lose on a dominant or separable cause of action, and if you consider there is a risk you might lose part of your case, make provisions for that, or factor that into the Calderbank offer;12
- Ensure you make a fresh offer on appeal;13 and
- If safe to do so, make an allowance for interest.14
Conclusion
To rely on a Calderbank offer for indemnity costs you have to show that the other party unreasonably or imprudently rejected the offer. In order to establish this, there are a number of elements and best practice rules that have been outlined above which should assist.
Don’t risk embarking on litigation by yourself, for fear of the financial cost being too high. We offer flexible payment arrangements, and in many cases, well-run litigation can improve your chances of an indemnity costs order, so that all or most of your legal fees are covered.
Contact Gibbs Wright Lawyers for your litigation needs.
[1] Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435 at 441 [20]; [2005] VSCA 298 at [20]
[2] Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435 at 441 [20]; [2005] VSCA 298 at [23]
[3] McBride v ASK Funding Ltd [2013] QCA 130 at [65]
[4] See for example: Busley & Anor v State of Queensland [2016] QCA 158 at [77]; Oversea-Chinese Banking Corporation v Richfield Investments Pty Ltd [2004] VSC 351; Toal v Aquarius Platinum Ltd (No.2) [2004] FCA 678 [20]; Williams v Minister for Environment & Heritage [2004] FCAFC 58; Re: J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers Western Australia & Anor Unreported FCA; Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchant Ltd (1988) 81 ALR 397
[5] See for example: Young Shire Council v Cummings & Anor (No 2) [2005] NSWCA 69 [15]; Busley & Anor v State of Queensland [2016] QCA 158 at [77]; Hazeldene Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] 13 VR 435 [25];
[6] Busley & Anor v State of Queensland [2016] QCA 158 at [77]; Hazeldene Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] 13 VR 435 [30]; Timms v Clift [1998] 2 Qd R 100
[7] See for example: Hazeldene Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] 13 VR 435 [25]; Busley & Anor v State of Queensland [2016] QCA 158 at [77]
[8] Hazeldene Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] 13 VR 435 [25]
[9] Timms v Clift [1998] 2 Qd R 100
[10] See for example: Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322; Cutts v Head [1984] Ch 290; Leichhart Municipal Council v Green [2004] NSWCA 341 [14]; Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322; PCRZ Investments Pty Ltd v National Golf Holdings Ltd [2002] VSCA 24 [2] and [35]; Cachia v Hanes (1991) 23 NSWLR 304; Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225, 228
[11] See for example: Monie v Commonwealth of Australia (No.2) [2008] NSWCA 15
[12] See for example: Monie v Commonwealth of Australia (No.2) [2008] NSWCA 15 [64]; see also Busley & Anor v State of Queensland [2016] QCA 158
[13] See for example: Ettingshausen v Australian Consolidated Press Ltd (1995) 38 NSWLR 404 at 410; Busley & Anor v State of Queensland [2016] QCA 158 at [80]; Baresic v Slingshot Holdings Pty Ltd & Anor (No. 2) [2005] NSWCA 160 [21]; Steward v Atco Controls Pty Ltd (in Liquidation) [No 2] [2014] HCA 31 [7]; Estate of Virgona v De Lautour (No 2) [2007] NSWCA 323; Brymount Pty Ltd v Cummins (No 2) [2005] NSWCA 69
[14] See for example: Hadzigeorgiou v O’Sullivan [1983] 1 Qd R 55, 58
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The content of this publication is intended as general commentary only and may not be suitable or applicable to your personal circumstances. It is not intended to replace independent legal advice. You can contact us at our Brisbane Office for a free consultation on a range of litigation matters on (07) 3088 6364.
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Gibbs Wright is a Queensland litigation law firm based in Brisbane that exclusively practices in civil and commercial litigation, negotiation and dispute resolution throughout Queensland, Australia.
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