I recently presented at Tress Cox Lawyers on offers of compromise. I have reduced the key principles down to the following set of ten.
- Unless it’s a verdict for the defendant with each party to pay its own costs, don’t mention costs in a 20.26 offer; let the UCPRs do the work.
- UCPR offers should be made as far out from the trial as possible (preferably more than 2 months).
- State that it’s an offer under rule 20.26 but note in the covering letter that it’s a Calderbank offer in the alternative.
- A Calderbank offer must give something of substance away (i.e. costs, a right, money) for its rejection to result in an indemnity costs order, ie. a genuine compromise.
- Rejection of a Calderbank offer must have been unreasonable taking into consideration all of the relevant circumstances at the time the offer was made for it to result in an indemnity costs order.
- The offeree’s prospects must be considered in deciding how generous (or not) a Calderbank offer ought to be so as to enable its rejection to be deemed unreasonable and result in an indemnity costs order.
- In drafting a Calderbank offer state the offeror’s position in the litigation with clarity and enough (but not too much) detail.
- Separate the elements of the offer which relate to the principal claim and any cross-claim.
- Interest should be stated separately with the basis (eg. under a contract or Civil Procedure Act) and mathematics clearly exposed.
- Make a new offer in any appeal proceedings.