Offers of Settlement

Offers of Settlement
Sep 9, 2022

Divorce can be overwhelming for each individual involved, to the point where it can sometimes feel as if you’re on a bullet train and cannot get off. It is important for you to know however, that despite where you are at in your divorce, there is always opportunity to come to an agreement with your spouse and settle differences without Court intervention.  One option to consider during any stage of the divorce process is an offer of settlement.  Let’s take a look at offers of settlement and what you should consider before making an offer:

1. What Is A Settlement Offer?
A settlement offer is a letter sent to your spouse in a divorce setting out proposals for the resolution of issues that are in dispute. This can include issues in dispute including ancillary relief, custody and division of property and any other issues that are specific to you and your spouse.  A settlement offer can be sent as an “open” offer which means it can be submitted to the Court at any time or it can be sent “Without Prejudice” and are not admissible in evidence in Court proceedings.  If your settlement letter is marked “Without Prejudice, Save as to Costs” it is not admissible in evidence in Court proceedings except when it’s related to the issue of costs.  This is discussed further below under “Calderbank” offers.

2. Why Are Settlement Offers Beneficial?
Sending a settlement offer to your spouse can be beneficial because it sets a basis for resolving issues in dispute. Even if your spouse does not agree to the proposals, it can be a starting ground to discuss the issues further and try and come up with a resolution that you can both be happy with.  Settlement offers can also be beneficial if you and your spouse want to attempt to resolve issues in dispute with or without continuing to move forward with the Court process which can be timely and very expensive.  It is important to remember that when sending out settlement offers, that you speak to your solicitor to assist in preparing an offer that is reasonable and practical.

3. What Are Calderbank Offers?
You may have heard about “Calderbank” offers. Calderbank offers are sanctioned offers and refer to “Without Prejudice, Save as to Costs” offers of settlement.  This means that when a case is brought before the Court, a Judge in his or her discretion as to costs, may take into account an offer expressed as a “Calderbank” or “Without Prejudice, Save as to Costs” letter.  It is important to discuss this with your solicitor as to the timing of Calderbank offers as they can play into your litigation strategy during the divorce proceedings.  Many times, Calderbank offers are sent by a party before a substantive hearing where issues will be dealt with by the Court.

4. Offers in Good Faith:
A settlement offer should be reasonable and practical and more importantly, made in good faith. The Court in Hong Kong stress the importance of negotiating in good faith and an offer of settlement is your attempt to negotiate. Negotiations should be done in a constructive manner and it could result in adverse consequences including costs if it is not conducted in good faith.  Good faith includes cooperation between the parties, exploring reasonable settlement options and engaging in constructive discussion.  Ignoring settlement letters or failing to provide substantive responses is not helpful and could result in adverse consequences.

Finally, If you have a solicitor who does not encourage good faith in your settlement attempts, it may be time to consider a new solicitor as solicitors can play an important role in encouraging settlement and resolution.

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