Does A Calderbank Offer Expire At The Door Of The Court?

MEF v St George's Healthcare NHS Trust [2020] EWHC 1300 (QB)

In the course of costs negotiations following settlement of liability in this clinical negligence claim the Defendant made a number of Calderbank offers, including one for the sum of £440,000 on condition that if not accepted within a reasonable time, the Claimant would be responsible for the Defendant’s costs.

This offer was not accepted. However, neither was it rejected and the matter proceeded to a detailed assessment hearing before Master Brown in the Senior Courts Costs Office in September 2019.

Just before the end of the second day, it was known by the parties that, if the assessment continued to a conclusion, the Claimant would recover less than £440,000.

The Claimant’s solicitors, Stewarts Law, sent an email to the Defendant that afternoon (at 16:11) purporting to accept the Defendant’s offer.

The Defendant argued that the offer was no longer open for acceptance once the detailed assessment hearing had commenced.

The dispute as to the effect of the purported acceptance was transferred to another Costs Judge, Master Rowley, who, after argument the next day, held that it constituted a valid settlement of the Claimant’s claim.

The Defendant appealed on grounds that the offer had lapsed at the door of the court. Specifically, it was said that the offer “came to an end after the lapse of a reasonable time which was no later than the start of the detailed assessment hearing and/or that there was an implied term of that Offer that it would lapse on the start of the detailed assessment hearing.”

Sitting with Master Haworth as his assessor, Mr Justice Morris rejected the appeal:

“It was always open to the Defendant to put a time limit on the offer. Equally it was open to it to withdraw the offer at any time. This is so even once the hearing had started. In this regard, the Judge’s reasons are essentially sound. His experience of time limited offers has been confirmed to me by Master Haworth’s own experience. As regards the feature of ongoing re-calculation in a detailed assessment, the offeror (here the Defendant) is equally in a position to do that calculation, and is free at any time to withdraw the offer, if it is doing much better than the offer. Here, the Defendant could have withdrawn the offer at lunchtime on the second day of the hearing.”