Category: Claims handling · Reviewed by Mark Fox, Broker · Renewals · Last reviewed 2026-06-11
A Calderbank offer is a settlement offer made “without prejudice save as to costs” — protected from disclosure on the substantive issue but disclosable on the question of costs after the substantive issue has been decided.
The Calderbank offer takes its name from Calderbank v Calderbank [1976] Fam 93, in which the Court of Appeal recognised that parties to litigation could make settlement offers that retained without-prejudice protection while reserving the right to refer to the offer when the court came to deal with costs.
Calderbank offers were the dominant settlement device in English litigation before the introduction of Part 36 in 1999. Since then, Part 36 has occupied much of the territory, with its codified consequences and prescribed form. Calderbank survives as a more flexible alternative used where the prescriptive Part 36 form would not fit the situation — for example, where the offer is on unusual terms, where the relevant period is to be different, where the parties are at the very early or very late stage of proceedings.
The Calderbank principle is recognised by the common law and reinforced by CPR 44.2(4), which requires the court to have regard to the conduct of the parties, including any admissible offer to settle, when making costs decisions.
The offer is protected by the without prejudice rule (see Rush & Tompkins v GLC [1989] AC 1280 and Unilever v Procter & Gamble [2000] 1 WLR 2436) on the substantive issue. The “save as to costs” qualifier sits within the without prejudice framework and is one of the recognised modes by which a party reserves the right to use otherwise privileged material on the question of costs.
The costs consequences of a Calderbank offer are discretionary, not formulaic. The court considers the reasonableness of the offer, the parties’ conduct, the proximity of the offer to the outcome, and any other relevant factor. By contrast, Part 36 imposes a defined set of consequences subject only to the court’s residual discretion to depart in case of injustice.
The leading modern authorities on the relationship between Calderbank and Part 36 include Multiplex Constructions [2008] EWHC 2280 (TCC) (recognising that Part 36 has not entirely displaced Calderbank) and Smith v Trafford Housing Trust [2012] EWHC 3320 (Ch).
In family law and Court of Protection proceedings, where Part 36 does not apply, Calderbank remains the principal formal settlement device.
A Calderbank offer is made in writing, marked “without prejudice save as to costs”, and sets out the terms on which the offeror is prepared to settle. Unlike Part 36, there is no prescribed form, no relevant period and no automatic acceptance mechanism.
The offer remains open for whatever period the offeror states. If accepted, the parties enter a settlement agreement on the terms of the offer. If rejected, the offer can be referred to after trial on the question of costs.
The costs consequence of a Calderbank offer is in the court’s discretion. The court will consider whether the offer was a reasonable attempt to settle, whether its rejection caused unnecessary cost, and what costs order would best reflect the parties’ conduct. The court can order:
The court will not impose the prescriptive consequences of Part 36 on a Calderbank offer. Where a party wants the certainty of those consequences, the Part 36 form must be used.
Calderbank offers are particularly useful in three situations. First, where the Part 36 form is too restrictive — for example, where the offer is conditional on some external event. Second, where the offer is made at an unusual stage of proceedings (very early, before the parties’ positions have crystallised; or very late, after Part 36 has been used and refused). Third, where the dispute is not amenable to Part 36 — particularly in some family and trust proceedings.
In insurance defence, Calderbank offers are often used alongside or after Part 36 offers. A defence might make a Part 36 offer at £600,000, then a Calderbank offer at £750,000 some months later when new evidence emerges, then a final Part 36 offer at £820,000 close to trial. Each has its own costs implications.
“Tactical Calderbank” offers — used to put pressure on a party without engaging the full Part 36 architecture.
“Tomlin Calderbank” combinations — settlement structures that combine confidentiality provisions (Tomlin order) with Calderbank offer mechanics.
“Lock-out Calderbank” — offers with a defined acceptance window after which the offer is automatically withdrawn.
“Conditional Calderbank” — offers contingent on external events such as regulatory approval, the outcome of a parallel proceeding, or the conduct of a third party.
A property dispute over a contested easement is litigated between two commercial landowners. The defendant’s insurer (a residual property liability cover) authorises a Calderbank offer of £180,000 to settle, made eight weeks before trial. The offer is conditional on the claimant withdrawing a related notice against the defendant’s neighbouring property (a condition that would be hard to fit into Part 36). The claimant rejects; the trial awards the claimant £140,000 in damages. The defendant refers to the Calderbank offer on costs. The court holds that the offer was reasonable and the rejection unreasonable, and orders the claimant to pay the defendant’s costs from the date of the offer (£62,000) on the standard basis. The net effect: claimant recovers £140,000 minus £24,000 (its own irrecoverable costs from the date of offer) minus £62,000 (defendant’s costs from that date) = £54,000. Without the Calderbank offer, costs would have followed the event and the claimant’s net recovery would have been substantially higher.
By Matt Bartlett, Director, on 2026-06-11. Next review: 2026-12-11.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-11. Apex Insurance Brokers Limited, FCA FRN 724952, Companies House 07014570. Not regulated advice — consult your broker on your specific position.
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