Calderbank offers trigger early settlement negotiations

Calderbank Offers - This is one for the insurers and insureds!

Calderbank offers and offers of compromise generally are an extremely effective tool to trigger negotiations

AND potentially resolve proceedings early!

AND even if an offer is not accepted - They can trigger negotiations in legal proceedings (or pre litigation) and create costs consequences when effectively drafted

In that case:

The benefit of costs consequences on an ‘indemnity basis’ are a major reason why offers should be made EARLY!!!!!!

Here are some reasons offers are NOT made (but these should not mean an offer cannot be considered or made):

1. Let’s wait for the pleadings; or

2. What about - Let’s wait of the close of pleadings; or

3. Maybe, Let’s wait for further and better particulars; or

4. We’re a defendant, maybe this alleged claim or proceedings will go away; or

5. Why incur expenses when it is not needed?

HOWEVER - MY OPINION and from a lawyer who acts for both Plaintiffs/Applicants and Defendants/Respondents:

• If you have a reasonable understanding of the claim, documents and loss there can be significant benefits for a defendant or insurer of EARLY offers.

• After all, our obligations are to minimise our client’s legal costs.

Further, it obviously depends on the case and merits of course,

But one reason to make an offer is that section 22 of the Civil Procedure Act 2010 (Vic) requires parties to use reasonable endeavours to resolve a dispute

PLUS - the overarching obligations apply to:

• a person who is a party; and

• a legal practitioner; and

EVEN an ‘INSURER’ or ‘Funder’ (see section 10 of the CPA)

AND an effective Calderbank or for that matter a letter supporting a Court Rules offer or offer in accordance with section 112 - 114 at the VCAT is not just about NOTICE but it can:

• properly set out the claim, causation, loss; and

• make clear the risks for the other party.

By demonstrating the case your client has and that the offer is reasonable, this can lead to settlement negotiations at an early juncture and saving substantial legal costs.

Have you considered if this is an appropriate step for a stubborn file?

This article is a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Tagged as:

• litigation