Harper James advises businesses on settlement offers and commercial disputes under the laws of England and Wales. A settlement offer is a proposal to resolve a dispute without a trial, usually by payment, performance of agreed obligations, or both.
A business can make a contractual offer, a “without prejudice” offer, a Calderbank offer, or an offer under Part 36 of the Civil Procedure Rules. Part 36 offers follow prescribed requirements and have specific consequences for costs if the recipient fails to obtain a better result at trial. A Calderbank offer is generally made on a without prejudice save as to costs basis, allowing the court to consider it when deciding costs. The wording, deadline, scope of the settlement and treatment of legal costs should be stated clearly.
The decision should reflect the value of the claim, the available evidence, enforcement prospects, legal spend, management time and the risk of an adverse judgment. The recipient should check whether the offer covers the whole dispute, includes interest and costs, requires confidentiality, or imposes obligations such as withdrawing proceedings or supplying documents. An offer should be accepted in the required form and within any applicable deadline. Failure to respond can affect later cost arguments, particularly where the offer is a Part 36 offer.
Before making an offer, the business should identify its minimum acceptable outcome and the matters that require protection in the settlement agreement. These often include payment dates, instalments, releases, confidentiality, intellectual property rights, continuing contractual duties and consequences of breach. A written agreement or court order should record the final terms. Settlement discussions do not remove existing procedural deadlines unless the parties agree an appropriate stay or the court gives directions. A carefully timed offer can therefore reduce uncertainty while preserving the business’s position if the dispute proceeds to mediation or trial.