As a firm that offers all round advice, rent reviews are part of our daily experience. However it is sometimes better to try to settle than carry on with relentless cost accumulation. So-called Calderbank offers, named after the decision in the case Calderbank v Calderbank, are an important tool in negotiations, which landlords and tenants can make at any stage in a rent review. A Calderbank offer is essentially a written offer to settle “without prejudice save as to costs.
Unlike “without prejudice” correspondence, the Calderbank expressly reserves the right for the offer to be brought to the notice of the Arbitrator on the question of costs if the result for the party receiving the offer is less favourable than what was offered. The terms of the offer will remain confidential until then.
It is an important tool in negotiations that can be used not only to protect a client’s position on costs but also to assist in attempting to settle a dispute early on in a proceeding. However, the party making the offer is not automatically entitled to costs if they win the case. The Arbitrator will take into account other factors including the circumstances of the case and whether the offer remained open for acceptance for a reasonable period of time, which is normally 21 days.
It is clear that Landlords and tenants need to give careful consideration on making or receiving a Calderbank offer, as offers may be binding if accepted in open correspondence. In addition, although a Calderbank may be accepted after the stated period for acceptance (unless they are withdrawn), if they are accepted after the deadline the party making the offer will be entitled to its costs up to the date of acceptance including their share of the abortive fees of the Arbitrator.
Many of our rent reviews are settled satisfactorily through negotiation but the Calderbank offer is a useful tool to use in the appropriate cases.