Calderbank Letters and Formal Offers to Settle

[10.10] We have seen in Chapter 9 how the court promotes settlement of disputes through discretionary utilisation of its power to refer matters to alternative dispute resolution (ADR). Another means by which the courts promote settlement offers from the other party. The financial penalty is achieved by the imposition of adverse costs orders made against the that (in some instances unreasonably) rejects such an offer. As these costs orders may amount to an award of indemnity costs, there is an unambiguous financial incentive to accept reasonable offers to settle. This chapter will study the mechanics of this process.