Settlement offer

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A settlement offer or offer to settle is a term used to describe an offer to resolve an outstanding issue or account. The term "settlement offer" may also refer to a statutory offer to compromise in a civil lawsuit. In either case, the term is used to describe a communication from one party to the other suggesting a settlement - an agreement to fully and finally resolve the outstanding issue, account or dispute.

In the English Law, Part 36 of the Civil Procedure Rules governs this area.

In the US, evidence of settlement discussions generally, and of settlement offers specifically, is generally inadmissible in court. This is a policy-based exclusion, intended to encourage the settlement of cases out of court, thus freeing up the resources of the court system.

In the US state of Florida the offer of a judgment and demand for judgment in negligence-based torts are governed by Title XLV (Torts) Chapter 768 (Negligence): 768.79  "Offer of judgment and demand for judgment". It is also governed by rule 1.442 of the Florida Rules for Civil Procedure "PROPOSALS FOR SETTLEMENT". This process involves making an offer by either party and how the judgment amount affects whether legal fees and costs will be awarded.

In Australia and the United Kingdom, offers of settlement may be called Calderbank Offers, Calderbank Letters[1] and Offers of Compromise (pursuant to rule 20.26 of the Uniform Civil Procedure Rules)[2]

A Calderbank offer can be made in writing or orally. Oral offers may create evidentiary issues such that less wait is given to the offer.[3] An effective offer can be made before action.[4] Calderbank Offers and Calderbank Letters often have a major impact on the allocation, by courts, of legal costs between parties.

See also[edit]


  1. ^ Calderbank v Calderbank [1975] 3 All ER 333.
  2. ^ Kain v Mobbs [2008] NSWSC 599. Austlii
  3. ^ see Gilsan v Optus (No 4) [2005] NSWSC 1073 AustliiI
  4. ^ Ofria v Cameron (No 2) [2008] NSWCA 242Austlii