In a recent and significant judgment, the Supreme Court of Appeal (SCA) has, for the first time, directly considered the effect of Calderbank offers in South African law. The decision in Itokolle-Clinix Private Hospital (Pty) Ltd v MNT obo DORM [2025] (16 October 2025) (Itokolle-Clinix) brings welcome clarity as to how such offers can influence cost awards in litigation proceedings.
The case serves as a timely reminder of the risks and rewards of settlement negotiations and offers of settlement made prior to the final adjudication of a matter.
What is a Calderbank offer?
A Calderbank offer – named after the English case Calderbank v Calderbank – is a settlement proposal made ‘without prejudice save as to costs’. It allows a plaintiff to make a reasonable offer to settle the dispute between the parties before trial. If the offer is rejected and the defendant ultimately fares worse at trial, the court may have regard to the offer when considering who pays the legal costs of the matter, as well as, importantly, on what scale.
While South African High Courts have previously referred to Calderbank offers, this judgment marks the first express endorsement and application of such offers by the SCA. In particular, the SCA notes, at paragraph 49 of its judgment, that:
Calderbank offers’ serve an important public interest. It is in the wider public interest to conserve and not waste public resources on litigation that could be curtailed or avoided by settlement.
The facts
The underlying dispute in Itokolle-Clinix stemmed from a medical negligence claim initiated in the High Court in terms of which the plaintiff’s child was born with cerebral palsy after complications during labour at a private hospital in Mahikeng.
The plaintiff sued both the hospital and the attending obstetrician for damages. Two days before the trial, the plaintiff made the defendant (the hospital) a Calderbank offer – agreeing to settle the matter in the amount of 85% for her agreed or proven damages. The offer was rejected and the hospital countered with a 20%, and later 50%, proposal, which the plaintiff refused.
Kaamilah Paulse 24 Apr 2024 At the end of the trial, the High Court found both defendants (the hospital and the doctor) liable for 100% of the plaintiff’s damages. On a reconsideration of the costs awarded, it awarded the plaintiff costs on an attorney and own client scale (a significantly higher scale than the usual party and party costs scale) from the date of the offer, finding that the hospital’s rejection of the offer was unreasonable.
On appeal to the SCA (by the hospital as the appellant), the SCA upheld the High Court’s ruling. Accordingly, the SCA affirmed the High Court’s finding that Calderbank offers have a recognised place in South African law.
Key findings
Justice Coppin, writing for a unanimous bench, confirmed that:
- Calderbank offers have a recognised place in South African civil procedure: Even in the absence of formal rule-based offers (such as those available to a defendant, opposed to a plaintiff, under Uniform Rule 34), a ‘without prejudice save as to costs’ offer may be considered when deciding who should bear the costs of litigation, as well as on what scale.
- Reasonableness is the touchstone: The decisive question is whether the party rejecting the settlement offer acted reasonably in doing so. Here, the hospital had sufficient expert evidence at its disposal to make an assessment of the reasonableness of the proposal weighed against the risks of continuing to trial, yet it persisted with the matter regardless.
- Costs can be elevated: Where a party unreasonably refuses a (reasonable) settlement proposal, the court may order escalated costs – such as attorney and own client costs – from the date of the offer. In long-running and complex matters, an award on the attorney and own client scale will result in the successful party recovering significantly more legal costs from their opponent when compared to an ordinary party and party costs award.
Ziyanda Sibeko and Johnson Mthembu 16 Jan 2025 Why this matters
This decision highlights the practical importance of making and carefully evaluating genuine settlement offers. A well-crafted Calderbank offer can significantly influence cost outcomes and encourage early resolution of disputes. An unreasonably rejected offer of a fair settlement may lead to significantly steeper financial penalties in the form of legal fees, on top of the principal liability owed in terms of the judgment.
For plaintiffs, a Calderbank offer is a useful tool to encourage early settlement of a matter and, failing settlement, increases one’s chances of securing a significantly higher costs award if ultimately successful.
More broadly, the judgment promotes the efficient use of judicial resources and discourages needless and time-consuming trials, in circumstances where settlement between parties is possible and preferable.
