Most of these offers made by the Plaintiff often either go unnoticed or a significant period of time passes before any response is received from the Defendant, if at all. The case of Calderbank v Calderbank  3 ALL ER 333 (CA) being cited in the judgement of D and Another v MEC for Health and Social Development, Western Cape Provincial Government (2747/10)  ZAWCHC 17; 2017(5) SA 134 (WCC) could bring about new developments in South African law where the Plaintiff’s offer of settlement amount was less than the amount granted by a judge once judgment is handed down.
The Calderbank case was an important English Court of Appeal decision – a divorce case where the husband (Defendant) was said to have caused an unreasonable delay in the legal proceedings and he was then ordered to pay his wife’s (Plaintiff) legal costs as a result thereof.
The Calderbank case was then challenged in the United Kingdom, but eventually became practice that “Calderbank Offers” can be made. The practice was subsequently written into the United Kingdom and Australia’s Rules of Court.
The highlighted principle of the Calderbank case is that the Plaintiff can place the Defendant on risk by making an offer of settlement. If such an offer is ignored by the Defendant and the Plaintiff is awarded more when the matter proceeds to trial and judgment is handed down, the Plaintiff could disclose to the Judge that a “Calderbank offer” was made. If the offer met the requirements of a “Calderbank offer”, and if ordered by the Judge, the Defendant may be held liable to pay the Plaintiff’s attorney and own client costs over and above the party and party costs for which the Defendant will already be liable for.
In the Case of D and Another V MEC for Health and Social Development, Western Cape Provincial Government, Judge Trollip stated the following “I have thus come to the conclusion that in principle “Calderbank offers” are admissible in relation to costs and can be disclosed to the court for that purpose after judgment has been given.”
Judge Trollip went on further to mention that in considering whether a punitive cost order must be made against the Defendant the court must consider among other factors, whether the Defendant behaved unreasonably, and thus put the Plaintiff to unnecessary expense by not accepting the offer or making a reasonable counter-offer.
Although the Plaintiff in the case of D and Another V MEC for Health and Social Development, Western Cape Provincial Government was not successful in being granted a punitive cost order against the Defendant, it was a breakthrough of the “Calderbank offers “being fused into South African Law. A defendant should therefore be more cautious when considering offers made by a Plaintiff, so as to ensure that the Defendant is not at risk of paying indemnity or attorney and own client costs (over and above the party and party costs), where the Defendant forces the Plaintiff into protracted or unnecessary litigation, and a judge ultimately awards the Plaintiff the same or more in compensation than what the Plaintiff previously offered to accept as a settlement.
“Calderbank offers” will therefore be a useful tool that Plaintiffs can utilise in litigation to ensure that Defendants seriously consider offers made by Plaintiffs and will result in earlier settlements and costs limitations.
by Shaina Kim Steyn | Associate