MoJ consultation on the treatment of Calderbank offers when determining issues relating to costs – Law Society response

The proposals

The Family Procedure Rule Committee (FPRC) created the judicially-led Costs Working Group in November 2018 to:

  • review and engage in ‘blue sky thinking’ in relation to the functioning of the current costs regime in financial remedies cases
  • make recommendations, where appropriate, for reform of the Family Procedure Rules 2010 (FPR 2010)

One key area concerned encouraging parties to engage reasonably and responsibly in settlement negotiations.

As part of this, the FPRC is considering whether the FPR 2010 should be amended to allow any offers which are made “without prejudice save as to costs” (known as Calderbank offers) to be taken into account as “conduct” when the court is considering making an order requiring one party to pay the costs of another party.

The consultation had one question: “Do you consider that offers made “without prejudice save as to costs” should be admissible in considering the “conduct” of a party for the purposes of FPR r28.3?”

Our view

On balance, we think that offers made “without prejudice save as to costs”, which are clearly marked as such, should have recognition for the purpose of FPR rule 28.3.

It is our view that the recognition of Calderbank-type offers in this way is not the ideal solution and more consideration needs to be given to other factors such as:

  • wealth
  • needs
  • the timing of such offers

We think the FPR should have a new set of its own costs rules and we would want to see detailed guidance included in a bespoke practice direction on costs.

The hope that open offers would bring about more settlements, put pressure on unreasonable parties to settle and compromise cases to avoid high costs has proved unrealistic and unreasonable in practice.

Fundamentally, the needs of the parties must come first. Any new cost rules introduced should not take away from the needs of the applicant and any children involved.

Next steps

The consultation closed on 31 October.

The FPRC will analyse the results of this public consultation.

View the consultation on the Ministry of Justice website.

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