Calderbank offers revisited

By Miranda Whiteley

The recent Court of Appeal decision in Walker Construction (UK) Ltd v Quayside Homes Ltd suggests that it may not be necessary for a defendant to make a Part 36 offer to secure full costs protection at trial. We look at the circumstances in which a defendant can confidently make a Calderbank offer with a limited costs liability and the implications of the rather confusing message coming from the courts.

The existence of two separate regimes (offers complying with Part 36 and Calderbank offers, which do not) is a recipe for confusion. The problem was made much worse by the redrafting of Part 36 in 2007 and the uncertainty that followed about whether offers were valid Part 36 offers. From 2010, the Court of Appeal made a concerted effort to introduce certainty concerning the costs consequences of settlement offers.

The cause of certainty was put back by the majority decision of the Court of Appeal in Medway PCT v Marcus. The court held that where the quantum of a clinical negligence claim was legitimately much higher than the sum recovered by the claimant at trial (quantum was agreed at £525,000 but the claimant only recovered £2,000 because, although he won on liability, he failed on causation), it was fair for the defendant to recover 75 per cent of its costs…

Click on the link below to read the rest of the Mills & Reeve briefing.

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