Background
Sun Investments sued Kevin Graham, a solicitor, in a professional-negligence claim. After multiple versions of its statement of claim, Freeburn J had given Sun Investments leave to re-plead, requiring it to apply for leave to file a fresh pleading by 20 July 2026.
Sun Investments applied on the final day but its further amendment application was dismissed on 20 August 2026 because it still could not properly plead its case. The proceeding was dismissed without a trial on the merits. Graham then sought standard costs up to three unaccepted Calderbank offers and indemnity costs thereafter.
The Court’s Holding
Freeburn J ordered Sun Investments to pay Graham’s costs of the proceeding, including reserved costs, on the standard basis. Existing consent costs orders concerning earlier applications remained undisturbed.
The Court declined to award indemnity costs despite the three unaccepted Calderbank offers. A Calderbank offer does not automatically justify indemnity costs merely because the offeree obtains a less favourable outcome; the question is whether rejection was unreasonable or imprudent in all the circumstances. Although the offers were clear, allowed adequate time, foreshadowed indemnity costs and involved compromise, the claim failed at the pleading stage rather than after a merits determination. The Court could not conclude that rejecting the offers had been unreasonable.
Key Takeaways
- Failure to beat a Calderbank offer does not create a presumption of indemnity costs.
- The offeror must establish that the offeree acted unreasonably or imprudently in rejecting the offer.
- A proceeding dismissed for deficient pleadings, without a merits hearing, may make the offer-versus-outcome comparison less straightforward.
Why It Matters
The decision reinforces that Calderbank consequences remain discretionary. Courts must assess the reasonableness of rejection when the offer was made, rather than mechanically imposing indemnity costs after an unsuccessful proceeding.
For professional-negligence litigation, the case also illustrates that an inability to plead the retainer can end a claim before trial, while not necessarily establishing that the claim was always doomed to fail or that settlement offers should plainly have been accepted.