Offers of Compromise
The policy of the law is to encourage settlement rather than litigation. One such mechanism is the use of offers of compromise made under the court rules.
A party to court proceedings can make an offer of compromise, under UCPR 20.26, to try and resolve the dispute. If the offer is not accepted then there may be costs consequences if the maker does better than the offer at trial. As such non-acceptance of a valid offer of compromise can lead to an indemnity costs order if the person making the offer obtains judgement that is no less favourable than the offer.
Making an Offer to Settle
An offer of compromise is different to a Calderbank letter as it is made under the court rules. Generally, it must comply with certain requirements: -
- make it clear which part of the claim it relates to
- set out the orders sought (and what should happen with the balance of the proceedings)
- do not include costs in the offer
- make it clear it is an offer under the rules and state the consequences of non-acceptance
- explain how long it is open for and how it may be accepted
Let Us Help You
- Understand the nature of your case;
- Make an offer of compromise that increases your chances of getting indemnity costs if it is not accepted;
- Help you respond to an offer of compromise in an appropriate fashion;
- Argue the costs consequences of an offer of compromise.
* This content does not purport to give legal advice. Readers must obtain their own legal advice, that applies to the particular circumstances of their case, before taking any action at all.