Things to know with regards to OFFER TO SETTLE

Q: What is an offer to settle?

A: The common law origin of offer to settle is known as the “Calderbank offer”, named after the case of #Calderbank v Calderbank. An offer to settle occurs when a party offer an out of court settlement to the other party before the finality of their matter in court. The purpose of such an offer is to spur the parties to bring litigation to an expeditious end without judgment and thus to save costs and judicial time. The procedure and principles of the offer to settle is governed under Order 22B of the Rules of Court 2012. A party may serve on other party an offer to settle in Form 34 and the party may accept the offer in Form 36.

Q: When an offer to settle can be made?

A: Any time before the court disposes of the matter

Q: Can the party withdraw the offer?

A: Yes. The party may withdraw the offer by notice of withdrawal in Form 35 before the acceptance

Q: When should the party accept the offer to settle?

A: Depends on whether a time to accept the offer is specified.

  • If a time is specified in the offer: the offer lapses at the expiry of the stipulated time if it is not accepted
  • If no time is stipulated: the offer may be accepted by the other party at any time before the court disposes of the matter

Q: Can the party disclose this offer to settle?

A:

General Rule

An offer to settle is deemed to be an offer to compromise or settle a matter, and is made on a without prejudice basis, except as to costs. Therefore, the offer cannot be filed in court or mentioned in pleadings or affidavit. It cannot be disclosed to court to be used as evidence to indicate admission of guilt or liability by the party making the offer 

Exceptions

  • Where the offer is accepted, the court may incorporate any of its term into a judgment
  • When all of the question of liability and relief already be determined, then the court would be informed of the offer for the purpose of determining the issue of cost 

Q: How to determine the cost

A: Depends on whether the party has accepted the offer.

  1. Where the offer has been accepted, each party shall bear his own cost
  2. Where the plaintiff did not accept the offer but he obtains judgment in his favour, the costs shall be determined as follows:-
    • The plaintiff is entitled to cost where the judgment is more favourable than the offer to settle
    • Where the judgment is same as / less favourable than the offer to settle  
      • Plaintiff is entitled to costs to the date the offer was served  
      • Defendant is entitled to costs from that date

Q: What is the consequence of non-compliance of the terms of offer

A: The party can apply to the court for a judgment on the accepted terms of the offer OR continue with the proceeding as if there had been no offer to settle