Calderbank offers explained: “without prejudice save as to costs”

The name comes from Calderbank v Calderbank [1975] 3 All ER 333, a family case in which the Court of Appeal accepted that a party could make an offer that stayed confidential on the merits but could be shown to the court once the question of costs arose. The label “without prejudice save as to costs” has been used ever since.

The offer sits between an open offer, which the judge can see at any time, and a purely without prejudice offer, which the judge can never see. That middle position lets a party make a realistic proposal without weakening its case, while still protecting itself on costs if the offer is unreasonably refused.

CPR 44.2(4)(c) tells the court to consider any admissible offer to settle that is drawn to its attention and is not a Part 36 offer. A Calderbank offer is exactly that. The court considers it alongside the parties’ conduct and whether a party has succeeded on part of its case, and then decides what order is fair.

Because the court has a discretion, beating a Calderbank offer does not guarantee a particular result. The judge will ask whether the offer was genuine, clear and open long enough to be considered, and whether the outcome was in fact better for the offeror. A modest margin may be outweighed by other factors, such as unreasonable conduct by the party who made the offer.

Where a Calderbank offer is clearly beaten and the refusal was unreasonable, the usual result is that the offeree pays the offeror’s costs from a sensible date after the offer was made. Indemnity costs or enhanced interest are not automatic, as they can be under Part 36, but the court may order indemnity costs if the refusal was out of the norm.

Part 36 is a self-contained code with defined consequences, set out in CPR 36.17, including possible indemnity costs, enhanced interest and an additional amount. Those benefits come with strict formal requirements: the offer must be in writing, state that it is made under Part 36, specify a relevant period of at least 21 days and cover the whole claim, part of it or an issue.

A Calderbank offer is more flexible. It can include terms Part 36 cannot easily handle, such as non-money terms, confidentiality, a package covering several claims, or an offer that is only open for a fixed time. That flexibility is the reason to choose it. Many practitioners make both: a Part 36 offer on the money claim and a Calderbank letter on wider terms.

A badly drafted Part 36 offer that fails the formal requirements will not carry the Part 36 consequences, but the court may still treat it as an admissible offer under CPR 44.2. That is a fall-back, not a strategy.

Offers are just as important once the only dispute is the amount of costs. CPR 47.20 says the receiving party is normally entitled to the costs of detailed assessment, but the court must take into account any written offer made “without prejudice save as to the costs of the detailed assessment proceedings”. A paying party who makes a realistic offer early can shift the costs of the assessment if it is not beaten.

Part 36 also applies to detailed assessment proceedings, so both tools are available. Whichever is used, the offer should say whether it includes interest, VAT and the costs of preparing the bill, so that the court can compare it fairly with the assessed figure.

A good Calderbank letter is clear on its face. Head it “without prejudice save as to costs”, state the sum or terms offered, say how long the offer stays open, deal with interest and costs, and explain why the offer is reasonable. Keep a copy that shows when it was sent and received.

In family financial remedy proceedings the position is different: the Family Procedure Rules treat Calderbank-style offers as inadmissible on costs, so take specialist advice there.