A settlement offer or offer to settle is a term used to describe an offer to resolve an outstanding issue or account. The term "settlement offer" may also refer to a statutory offer to compromise in a civil lawsuit. In either case, the term is used to describe a communication from one party to the other suggesting a settlement - an agreement to fully and finally resolve the outstanding issue, account or dispute.
In the English Law, Part 36 of the Civil Procedure Rules governs this area.
In the US, evidence of settlement discussions generally, and of settlement offers specifically, is generally inadmissible in court. This is a policy-based exclusion, intended to encourage the settlement of cases out of court, thus freeing up the resources of the court system.
In Connecticut an offer of compromise is governed by Connecticut General Statute 52-192a. An offer of compromise is a pleading that gets filed with a court to settle a case for a specific amount of money. If the opposing party accepts the offer the case is over. An offer of compromise can first be filed 180 days after the date of service in standard negligence cases and 365 days in medical malpractice cases. An offer of compromise can add a significant amount of money to a case. Interest runs at a rate of 8% over the offer amount and relate back to the date the lawsuit was filed.
In the US state of Florida the offer of a judgment and demand for judgment in negligence-based torts are governed by Title XLV (Torts) Chapter 768 (Negligence): 768.79 "Offer of judgment and demand for judgment". It is also governed by rule 1.442 of the Florida Rules for Civil Procedure "PROPOSALS FOR SETTLEMENT". This process involves making an offer by either party and how the judgment amount affects whether legal fees and costs will be awarded.
In many jurisdictions, written agreement between the litigants become binding agreements pursuant to the rules of procedure. In Arizona, the Rules of Civil Procedure 80 governs binding settlement agreements in civil court and rule 69 of the Arizona Rules of Family Law Procedure governs binding agreements in family court. This can be a powerful tool for attorneys and for those representing themselves. Too often, attorneys and self representing litigants do not spend enough time studying how to write successful settlement proposals. But crafting a good settlement offer can save both sides thousands of dollars.[1]
In Australia and the United Kingdom, offers of settlement may be called Calderbank Offers, Calderbank Letters and Offers of Compromise (pursuant to rule 20.26 of the Uniform Civil Procedure Rules)
A Calderbank offer can be made in writing or orally. Oral offers may create evidentiary issues such that less weight is given to the offer. An effective offer can be made before action. Calderbank Offers and Calderbank Letters often have a major impact on the allocation, by courts, of legal costs between parties.