Here today, gone tomorrow – Calderbank offers and costs protection

A recent case highlights a mistake to avoid when trying to obtain costs protection from Calderbank offers.

In many cases, parties wish to make 'without prejudice save as to costs' offers or Calderbankoffers, outside the CPR Part 36 regime.  Often, a defendant will be reluctant to make a Part 36 offer because he will not want to assume an open-ended liability – for example, if he does not know what the claimant's costs are, or if he considers them excessive.

Parties who make Calderbank offers will often be hoping to achieve some costs protection if their offer is not accepted.  Pursuant to CPR Part 44, the Court will have regard to any admissible offer to settle which is drawn to the Court's attention and that is not a CPR Part 36 offer (CPR Part 44.2(4)(c)).  Coward –v- Phaestos Ltd [2014] EWCA Civ 1256 provides that the Court's approach to Calderbank offers and Part 36 offers is not the same.  CPR Part 44 and Part 36 are separate regimes with separate purposes.  The primary consideration when considering costs in light of a Part 36 offer is whether the offeree has improved his position by any amount.  CPR Part 44 allows the Court to take an "open-textured" approach and consider "whether the fruit of the litigation was worth the fight".

In Patience –v- Tanner, the defendants' crucial mistake is that they withdrew a Calderbankoffer that the Court found should have been accepted by the claimant.  The Court of Appeal seemed to view the claimant's conduct in not accepting the offer and the defendants' conduct in withdrawing it as equally blameworthy.  Accordingly, the Court ordered no order as to costs after the date of the offer.  The practical tip to take away here is to consider whether your offer really needs to be time limited.  If your client is prepared to accept £x today, would they be prepared to accept £x tomorrow?