Prior to a case going into a list for trial (or later with court permission) it is open to a defendant to make a payment into court of an amount which he believes is in full satisfaction of the amount due to the plaintiff. Certain state bodies and insurers need not even make an actual payment into court if they make a formal ‘notice of tender’ offer.
If a plaintiff accepts the tender offer or payment in (which we will refer to as a ‘tender’ for shorthand) the case is over. The tender would normally express that the defendant will also pay the plaintiff’s costs up to the date of the tender. This ought to be clarified if it is not apparent. If the plaintiff does not accept this, the case proceeds on to trial. The costs in this context and for the purpose of this article are known as party and party costs ie costs between the parties.
A judge is not aware of the tender until a trial has concluded. If the plaintiff wins his case but has failed to beat the amount of the tender in the award from the judge, then while he might get his costs paid by the defendant up to the date of the tender, he will often be responsible for the defendant’s costs from the date of the tender onwards. This can include the trial costs which can be a large proportion of costs. If a plaintiff wins his case and beats the amount of the tender he would usually seek all of his costs of the action.
A lesser alternative to a tender can be a certain style of offer letter from the defendant to the plaintiff known as a Calderbank letter. It will be marked ‘Without prejudice save as to costs’. It will express an amount as an offer and state that if the plaintiff fails to beat that figure at trial, the defendant will apply for its costs as from the time of the offer. Again, a judge will be unaware of this until an award has been made. It is less effective than a tender simply as does not use the formal tender or payment in methods as prescribed by the court rules but can be used for example when time has run out for a tender and may be more attractive to a non-insurer defendant who has not got available funds at the very moment the Calderbank offer is made.
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© Philip Vint & Co solicitors 2018