What is the Calderbank Principle and how does it relate to Costs Orders?

Calderbank v Calderbank [1976] Fam 93, [1975] 3 All ER 333; was an English Court of Appeal decision establishing the concept of a "Calderbank Offer".

A "Calderbank Offer" can often be identified by the disclaimer "without prejudice, save as to costs".

Commonly referred to as the Calderbank principle, it is a legal principle that allows a party to make a settlement offer to the other party in a dispute, which includes a condition that if the offer is not accepted and the case goes to court, the party making the offer will seek to recover their legal costs from the other party.

This principle is often used in civil litigation cases in the UK as well as Australia.

The Calderbank offer is a formal written offer of settlement made by one party to another party in a dispute.

The offer is made on a "without prejudice save as to costs" basis, which means that the offer cannot be used as evidence in court except for the purpose of determining costs.

If the other party rejects the offer and the case proceeds to court, the party who made the offer can ask the court to order the other party to pay their legal costs, even if they win the case.

The Calderbank principle is often used as a tactical tool to encourage settlement of a dispute, as it puts pressure on the other party to accept the offer to avoid the risk of having to pay the other party's legal costs.

However, it is important to note that the principle is not a guarantee of recovering legal costs, and the court will consider various factors, including the reasonableness of the offer, when deciding whether to award costs.