Court of Appeal Emphasises the “Decisive Importance” of Calderbank Offers

The Court of Appeal in a recent case (Padraig Higgins .v. The Irish Aviation Authority [2020] IECA 277) emphasises the “Decisive Importance” of Calderbank Offers under Section 169 of the Legal Services Regulation Act 2015. 

The Respondent, a commercial airline pilot was awarded damages by the High Court in a defamation claim against the IAA in 2016.  The jury awarded the Respondent €300,000 in general damages and €130,000 in aggravated damages and then applied a 10% deduction for the offer to make amends. Following a remote hearing in April 2020, the Court of Appeal reduced the award to €85,000, a sum less than a “reverse” Calderbank offer made by the Appellant on a without prejudice basis shortly before the appeal.

In a Judgment of Mr. Justice Brian Murray delivered in October 2020 the issue of costs was considered.

Murray J referred to subsection 168 and 169 of The Legal Services Regulation Act 2015 in evaluating the outcome of the appeal.  He noted that the court must assess whether either party was “entirely successful”, then whether despite being entirely successful if there is any reason why this party should not get their costs. If neither party was entirely successful, the court must look to see if either party is partially successful as per Section 168(2) and if this is the case the court must consider whether the party should be awarded costs pursuant to Section 169(1)(a)-(g).

In particular s.169(1)(f) requires the Court to have regard to ‘whether a party made an offer to settle the matter the subject of the proceedings and, if so, the date, terms and circumstances of that offer’. Order 99, r.3(2) states that for the purposes of this provision ‘an offer to settle includes any offer in writing made without prejudice save as to costs’.

Murray J stated “In the particular circumstances in which an appeal is brought to this Court only against the assessment of the quantum of damages by the High Court, the facility for the making of offers of the kind referred to in these provisions can assume decisive importance in determining what order for costs is just”.

Giving weight to the late stage at which the Calderbank offer was made and the fact that it was not accompanied by an offer to pay costs incurred up to that date, Murray J concluded that the offer was less than effective. On any reasonable estimate of the costs incurred by the respondent in connection with the appeal, the benefit to him of the offer was less than the sum this Court awarded on appeal.   

The Court noted that the respondent was presented by the appellant with an offer which it refused, and in resisting the appeal (and incurring consequent costs) it obtained a better award than the appellant had tendered.

However, the respondent failed in critical parts of the appeal, both in not holding the quantum awarded by the jury and in not having the matter remitted to the High Court for a new hearing before a jury.  

Noting that the respondent could have protected his costs by making his own offer or counter-offer but failed to do so, the Court concluded that making no order as to costs most fairly distributes the cost burden of the appeal.

The case turned on the particular facts but the courts comments in relation to Calderbank offers being of “decisive importance” is an important reminder for litigators that formal without prejudice offers under S.169 are an effective tool in achieving settlement and reducing costs.  

If you have any queries relating to the above article, please contact Alison Kelleher, Partner. Comyn Kelleher Tobin.