ON 5 JUNE 1975, the English Court of Appeal delivered Calderbank v Calderbank [1976] Fam 93;[1975] 3 WLR 586; [1975] 3 All ER 333; (1975) FLR Rep 113.

At the completion of court proceedings, costs usually follow the event (ie are awarded to the successful party).  However, a party may make an application for a special order for costs in circumstances where, before the completion of the proceedings, that party makes an offer without prejudice save as to costs and the other party unreasonably fails to accept the offer.

A successful party who has made a Calderbank offer may apply for an order for indemnity costs (ie full costs incurred on a lawyer/client basis, instead of the ordinary party/party costs).

An unsuccessful party who has made a Calderbank offer may apply for an order for costs (possibly indemnity costs), contrary to the rule that costs follow the event.

In determining such an application, the court is to exercise it’s general discretion as to costs. Such discretion is wide.

The practise developed in Australia has been for Calderbank offers to:

• be in writing.
• be marked “without prejudice, save as to costs”.
• be in clear, precise and certain terms capable of being accepted.
• specify a time for acceptance.
• be a genuine compromise.
• separate the issue of costs from the principal offer.
• state that the party intends to bring to the court’s attention the letter or it’s contents in any application for special orders as to costs.
• indicate that the offer is made in accordance with the principles enunciated in Calderbank v Calderbank.

Click to access CalderbankvCalderbank1975.pdf

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