Ireland: Calderbank – Tender Offer

Last Updated: 27 September 2012
Article by Kieran Cowhey and Paul Breen

Most Read Contributor in Ireland, September 2019

The high level of costs is a constant bugbear and a legitimate business concern for any organisation involved in litigation. In a jurisdiction like Ireland where the unsuccessful party has to pay the costs of the victor as well as its own, defendants have an incentive to bring litigation to a speedy conclusion by settlement and avoid the expense of a trial. What can a defendant do to get a reluctant or un-cooperative plaintiff to sit up and take notice of entreaties to settle.

The Lodgment

The Rules of the Superior Courts ("RSC") lay down procedures to help defendants focus the minds of plaintiffs. Order 22 of the RSC permits payments into court. This allows a defendant to pay into court a sum of money in satisfaction of a claim and is more commonly known as a lodgment. The lodgment has to be made at specific points in the legal proceedings and outside of those particular timelines the permission of the court must be sought.

In non personal injuries actions the procedure involves the actual lodgment of money into the courts office. Personal injuries cases differ since the introduction of S.I. 328 of 2000: Rules of the Superior Courts (No. 5) (Offer of payment in lieu of lodgment) 2000, which allows certain qualified parties (including indemnifiers authorised in the State as an insurance undertaking) to make a tender offer in lieu of a lodgment. In other words a qualifying party does not have to make an actual payment into court.

The advantage of making a Lodgment

Once a lodgment is accepted, other than completing some minor procedural issues, the litigation is usually at an end. It is only when a lodgment is not accepted, the matter proceeds to trial and the plaintiff fails to achieve a sum in excess of the lodgment that the penal costs' provisions in the RSC are applied. Under Order 22 Rule 6, the plaintiff is entitled to the costs of the action up until the time the lodgment was made, but crucially the defendant is entitled to the costs of the action from the time the lodgment is made. As the latter period will include the trial of the action, the plaintiff becomes liable for the defendant's solicitors costs, barristers fees and experts' fees. Consequently the costs can amount to a significant sum.

The making of a lodgment by a defendant is a useful tactical tool as Order 22 Rule 6 (3) clearly states that "...the defendant shall be entitled to the costs of the action ..." (except in cases of minors). While the advantage of a lodgment is that the court has no discretion if the award to the plaintiff is not greater than the lodgment, the procedure does have one downside. The lodgment must be made at specific times under the RSC and outside those time limits the permission of the court must be sought. The courts have little appetite in giving that permission and would need very strong and cogent reasons for doing so.

The problem for a defendant is that at the times it is required procedurally to make the lodgment it might not have the requisite information available to decide what sum to lodge. This might be because a plaintiff has given insufficient information or needs to amplify certain aspects of their claim. Additionally, as a case proceeds to trial, or indeed at trial, evidence might emerge which shows that a once strong defence is now less so. With timelines for making a lodgment lapsed, and a reluctance by the courts to give permission to make a lodgment, does a defendant have any tactical options to restrict its costs? The answer is yes - the Calderbank letter.

The Calderbank Letter

As stated at the outset the general rule that applies in Ireland is that "costs follow the event", meaning costs are awarded to the successful party. This right to costs is enshrined in Order 99 Rule 4 (1) of the RSC which states:-

"the costs of every issue of fact or law raised upon a claim or counterclaim shall, unless otherwise ordered, follow the event"

While the court can exercise discretion, as a general rule the successful party is awarded costs. As discussed above, this discretion is fettered by Order 22, Rule 6 when a plaintiff does not accept a lodgment which was made into Court and proceeds with the action and is not awarded more than the lodgment.

This position has however been changed to a degree by S.I. No. 12 of 2008, Rules of the Superior Courts (Costs) 2008, which amends Order 99 in relation to the courts consideration of costs. Order 99 1A (1) states that the Supreme Court and High Court:-

"... in considering the awarding of the costs of any appeal or any application in respect of an appeal, may, where it considers it just, have regard to the terms of any offer in writing sent by any party to any other party or parties offering to satisfy the whole or part of that other party's (or those other parties') claim or counterclaim the subject of the appeal, or application."

Order 99 1 (A) does not apply to an action in respect of a claim or counterclaim concerning which a lodgment or tender offer in lieu of lodgment may be made in accordance with Order 22. This amendment to Order 99 enables the courts to consider the terms of any offer in writing sent by one party to another. An "offer in writing" is stated as including "any offer in writing made without prejudice as to the issue of costs."

The purpose of this amendment to Order 99 is to allow the courts to have a more formal approach to what are known as Calderbank letters or offers and to provide a statutory footing for this practice. This type of offer derives its name from the English Court of Appeal decision in Calderbank .v. Calderbank [1976] Fam Law. 93 where an offer to settle was expressed in a communication which was "without prejudice except (or save) as to costs". The intention was that the offer would have all the features of a normal "without prejudice" offer, but allowed reference to be made to it in Court on the issue of costs, if the offer was not accepted.

For a period of time there remained a question whether this procedure was available in areas other than family law cases. However, over the years the Calderbank letter gained a more general application and has been used in many commercial cases. The existence of the Calderbank letter was recognised judicially in Ireland in O'Neill .v. Ryanair (No. 3) [1992] 1 I.R. 166 and was given consideration in Murnaghan .v. Markland Holdings Limited and Anor [2004] IEHC 406 and more recently in the case of Geraghty and Gilmore .v. Galway County Council & Ors [2011] IEHC 447. In the latter case Mr. Justice Murphy said in referring to the amended Order 99 1A (1) that:-

"the purpose of such a Calderbank letter or offer, as it is commonly known, is to promote the settlement because of the party's consciousness of a potential costs penalty if a reasonable offer is refused. The Calderbank letter also brings to the court's attention any unreasonable behaviour of parties and recognises the offerers willingness to reach a settlement. The rule does not require any necessary formality nor, indeed, separate Calderbank letters to be sent to the parties."

The Calderbank letter needs no formality in structure or timing. Order 99 1A (1) allows the courts consider "the terms of any offer in writing". Under the Order an "offer in writing" includes "an offer in writing made without prejudice save as to the issue of costs" - in essence a Calderbank letter. Interestingly Order 99 also allows the court to have regard to the parties behaviour and willingness to settle, issues normally cloaked by privilege. It can be said to also have public policy element in providing an incentive for the plaintiffs to end their litigation as soon as possible as well as discouraging wasteful and unreasonable behaviour by litigants.

When to serve "Calderbank" Letter?

The time by which a Calderbank letter should be served is open and it will be for the courts to decide its effectiveness. Anecdotally one hears of Calderbank letters being served just prior to trial or even during the trial. The cases of Murnaghan and Geraghty & Anor show two very different approaches. In Murnaghan the Calderbank letter was served on the day the trial was to begin and Laffoy J refused to consider the letter. She said that "metaphorically it came way beyond â€Üthe eleventh hour'". In Geraghty and Anor Murphy J. gave effect to a Calderbank letter that was served ten weeks after the commencement of the hearing of the action.


Offers to compromise are important litigation tools. The use of the lodgment is a more foolproof method in increasing the pressure on a Plaintiff, as the court has no discretion when it comes to penalising a plaintiff who fails to be awarded more than the lodgment. The Calderbank letter allows the court to have discretionary consideration to its terms as to costs and a defendant is heavily reliant on the courts discretion to depart from the general rule that the successful party is entitled to its costs. The Calderbank letter is therefore a useful costs saving tactic and as the Geraghty & Anor case shows it might never be too late to serve it.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions