Settlement offers can directly affect who pays legal costs at the end of a dispute. One of the most practical tools available in Singapore arbitration cases is the Calderbank offer, which is a type of settlement proposal that can be used later to argue that the other side should pay your legal costs because they rejected a reasonable offer.
This article explains what Calderbank offers are, how they work in Singapore, and what you need to know to use them effectively or respond to them properly.
1. What Is a Calderbank Offer?
A Calderbank offer is a settlement offer marked “without prejudice save as to costs.” This means:
- The offer cannot be shown to the judge during the trial (it stays confidential)
- The offer can be shown to the judge after the case is decided, when costs are being determined
Plainly, if you offer the other side a settlement, and if the other side rejects it and then does worse (or no better) at trial, you can show the judge your offer and argue they should pay your legal costs from that point onwards, because continuing the proceedings was unnecessary.
2. The Significance of Calderbank Offers
Legal costs in commercial disputes are often substantial. In many cases, costs can equal 20–40% of the amount being fought over. Who pays these costs at the end can significantly change whether a case feels like a win or a loss.
A Calderbank offer matters because, if:
| Context of Calderbank Offer | Result |
| You make an offer, they reject it, and you get a better result at trial | You can argue they should pay your costs from when they rejected your offer |
| You make an offer, they reject it, and you get the same result at trial | The court can still consider this when deciding costs |
| You receive an offer, reject it, and do worse at trial | You risk paying the other side’s costs |
The key point is that a rejected settlement offer does not become irrelevant after trial. Singapore courts will consider it when deciding who pays costs.
3. Calderbank Offers vs Formal Offers to Settle: A Comparison
Singapore has two main ways to make settlement offers that can affect costs:
| Feature | Calderbank Offer | Formal Offer to Settle (Court Rules) |
| Source of Rules | Case law (judge-made rules) | Rules of Court 2021 |
| Consideration of cost | Discretionary: judge decides what weight to give it | Automatic: specific consequences follow if conditions are met |
| Flexibility | High: can be tailored to complex situations | Lower: must fit within the rule framework |
| Best used when | Settlement terms are complex, or in arbitration | Straightforward monetary claims in court |
Both tools can be used in the same case.
4. What Courts or Tribunals Consider When Deciding Cost Consequences
When you bring a Calderbank offer to the Court’s or Tribunal’s attention at the costs stage, the Court or Tribunal may consider several factors:
- Clarity of terms: Could the other side actually understand and evaluate your offer?
- Timing: Did they have enough time and information to make a real decision?
- Response conduct: Did they engage with your offer, or simply ignore it?
- Comparative outcome: Was the final result worse, equal, or better than your offer?
- Case complexity: Was it reasonable to reject the offer given genuine uncertainty?
The Court of Appeal in The “Navigator Aries” [2023] SGCA 26 confirmed that an offer can still matter even if you only achieve the same result as your offer (not a better one). An easier way of understanding the court’s principle for taking into account a Calderbank Offer is then – if the other side could have settled for the same amount, why did everyone need to spend money on a trial and a hearing?
5. How to Make a Calderbank Offer
To create an effective Calderbank offer:
Step 1: Draft Clear Terms
- State exactly what you’re offering (specific amounts, what is included)
- Make sure the terms can be compared against a future judgment
Step 2: Use clear language
- Clearly state the offer is made “without prejudice save as to costs”
- Be explicit that you intend to rely on this offer if the case continues
Step 3: Give a reasonable deadline
- Allow enough time for genuine consideration
- Specify when the offer expires
Step 4: Keep records
- Document when and how you sent the offer
- Keep proof of delivery
Step 5: Revisit as the case develops
- What is reasonable early on may change after evidence emerges
- Consider making updated offers at key stages
6. How to Respond to a Calderbank Offer
If you receive a Calderbank offer, evaluate it realistically:
- Compare the offer against a realistic range of outcomes, not your best-case scenario
- Factor in the legal costs you’ll incur if you continue
Respond in writing:
- If the terms are unclear, ask for clarification
- If you reject, consider whether to make a counter-offer
- Document your reasoning internally
Potential relevant considerations:
- What is the realistic range of outcomes if this goes to trial?
- What will it cost us to get there?
- Does this offer fall within that realistic range?
- Can we justify continuing if we end up with a similar result?
7. Calderbank Offers in Arbitration
The same logic applies in arbitration, but the procedure differs:
- The framework comes from the arbitration agreement, institutional rules, and tribunal directions, instead of the Rules of Court
- Parties should agree early on how settlement communications will be handled
- Consider asking the tribunal to issue directions on when offers can be disclosed
For cross-border arbitrations, this is especially important. Parties from different legal systems may have different expectations about settlement communications and privilege.
8. Conclusion
Calderbank offers are a practical tool for managing cost risk in disputes. They allow you to make a genuine settlement proposal while preserving your ability to argue for favourable costs treatment if the other side rejects it and does no better at trial.
The key points to remember:
- A Calderbank offer is marked “without prejudice save as to costs”
- It can be shown to the court only after the case is decided, when costs are being allocated
- Singapore courts give these offers real weight, even when the final result is only equal to (not better than) the offer
- Clear terms, reasonable timing, and proper documentation make offers more effective
- Ignoring an offer you receive can count against you