Calderbank Offer Family Law
In family law, a Calderbank offer is a formal settlement proposal made on a “without prejudice save as to costs” basis.
This means the offer cannot be disclosed to the court during proceedings, except when determining legal costs after the case concludes.
Calderbank offers to encourage parties to settle disputes amicably, avoiding lengthy and expensive litigation.
Courts can consider whether a party unreasonably rejected a Calderbank offer when deciding cost orders.
Key Takeaway: Calderbank offers incentivise settlement in family law disputes and may impact the court’s decision on legal costs.
What Is a Calderbank Offer?
A Calderbank offer is a strategic tool used in family law to propose a settlement while protecting the proposing party’s interests.
It is presented in writing and clearly states that it is made on a “without prejudice save as to costs” basis.
This designation ensures the offer remains confidential unless the court addresses costs.
Key Takeaway: A Calderbank offer allows parties to propose settlements while retaining protection against potential cost repercussions.
The Purpose of a Calderbank Offer
Calderbank offers encourage parties to resolve disputes out of court, minimising time, stress, and expense.
They also serve to hold parties accountable for their decision-making during litigation.
If a party unreasonably rejects a Calderbank offer and the court later awards a less favourable outcome, the rejecting party may face adverse cost orders.
Key Takeaway: Calderbank offers to promote settlement by creating financial consequences for unreasonable rejections.
How to Draft a Calderbank Offer
To be effective, a Calderbank offer must be:
- Made in Writing: Clearly documented to provide evidence of the proposal.
- Reasonable: The terms should reflect a fair compromise based on the circumstances.
- Marked Correctly: Explicitly labelled as “without prejudice save as to costs” to ensure its proper use in court proceedings.
- Clear and Specific: Include sufficient detail to outline the proposed terms of settlement.
Key Takeaway: A well-drafted Calderbank offer is clear, reasonable, and properly labelled to ensure its enforceability in cost disputes.
When to Use a Calderbank Offer
Calderbank offers are commonly used in family law disputes involving property division, spousal maintenance, or parenting arrangements.
They are particularly effective when parties are at an impasse, as the offer may prompt a resolution by highlighting the potential cost consequences of continued litigation.
Key Takeaway: Calderbank offers are most effective when negotiations stall, encouraging parties to avoid prolonged disputes.
The Impact of Rejecting a Calderbank Offer
If a party rejects a Calderbank offer and the court’s final decision is less favourable to them, they may be ordered to pay some or all of the other party’s legal costs.
This can include indemnity costs, which are higher than standard costs, as a penalty for failing to accept a reasonable offer.
Key Takeaway: Rejecting a Calderbank offer without valid reasons can lead to significant cost penalties.
Examples of Calderbank Offers in Action
Consider a property settlement case where Party A offers Party B a settlement of $500,000. Party B rejects the offer, and the court ultimately awards $450,000. In this scenario, Party B could be liable for Party A’s legal costs incurred after the offer was made, as the rejection was deemed unreasonable.
Key Takeaway: Practical examples highlight how Calderbank offers can influence cost outcomes in family law cases.
Benefits of Calderbank Offers
- Encourages Settlement: Reduces the emotional and financial toll of court proceedings.
- Cost Protection: Provides leverage for reasonable settlement proposals.
- Judicial Consideration: Courts may view the offering party favourably if their proposal was reasonable.
Key Takeaway: Calderbank offers provide financial and procedural advantages, promoting resolution and fairness in family law disputes.
Calderbank offers are a powerful tool in family law, encouraging amicable settlements and influencing cost outcomes when disputes proceed to court.
By understanding their strategic use, parties can better navigate property, parenting, or financial disputes while minimising risk and expense.
Director of Melbourne Family Lawyers, Hayder manages the practice and oversees the running of all of the files in the practice. Hayder has an astute eye for case strategy and running particularly complex matters in the family law system.
