Victoria Flowers looks at when, and when not, to make a Calderbank offer


18th Oct 2024 | Blog


Victoria Flowers explores when and when not to make a Calderbank offer in the below blog.

Calderbank offers are offers to settle marked ‘without prejudice save as to costs’ – a very familiar concept to civil practitioners but, since 2006, something of an alien concept to family practitioners.

They are not, however, entirely dead and buried and clients can be offered some costs protection if they are made in the appropriate circumstances.

The general rule in ‘financial remedy proceedings’ is of course that the court will not make an order requiring one party to pay the costs of another party (FPR 28.3(5)), subject to litigation conduct (FPR 28.3(6)). In those cases that constitute ‘financial remedy proceedings’ (for these purposes), one of the factors the court must have regard to in deciding what (if any) order to make with regards to litigation conduct is any open offer to settle made by a party (FPR 28.3(7)). Calderbank offers are therefore inadmissible, and any such offers would serve no purpose on the question of costs at a final hearing because the court would never see them. The only time that without prejudice offers would be seen by the court in these proceedings is at FDR (FPR 9.17(4)). Without prejudice offers can still play a helpful role in terms of litigation strategy and negotiating, but no costs consequences arise if settlement is not achieved.

The policy reasons surrounding the inadmissibility of Calderbank offers in ‘financial remedy proceedings’, particularly given their potential to upset outcomes in needs cases, are well known. In J v J [2014] EWHC 3654 (Fam), a case in which Mostyn J addressed what he described as the grotesque leaching of costs, His Lordship did not mince his words in his views about Calderbank offers: ‘For my part I will fight its reintroduction to the last ditch. In my opinion it would be retrograde and unconscionable to allow a carefully crafted disposition to be turned upside down by virtue of a without prejudice letter produced after judgment has been given.’

However, practitioners must bear in mind that not every application which may be made on behalf of clients when resolving financial arrangements upon divorce or dissolution constitutes ‘financial remedy proceedings’ for these purposes.

Applications which do not fall within the ‘financial remedy proceedings’ definition include those for maintenance pending suit / maintenance pending outcome of proceedings, interim periodical payments, and appeals. In such cases the no order for costs rule does not apply (neither, however, does any presumption that the loser pays the winner’s costs). The court has a wide discretion as to costs, and Calderbank offers may be admissible in determining any costs application. There is no automatic rule that a costs order will be made if the offeror asserts they have ‘beaten’ their Calderbank offer, but the court can be invited to take it into account.

Twin benefits therefore appear of making Calderbank offers in these types of applications: encouraging fruitful negotiation behind the scenes, but also with the potential for teeth to bite in the form of costs consequences if the other party unreasonably refuses the offer. The prudent practitioner will remember to keep Calderbank offers in their toolkits for those applications which are not ‘financial remedy proceedings’ where they remain live and well.

Correct as at 02.10.2024


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