Law Society Consultation Response on Admissibility of Calderbank Offers in Costs Assessments in Financial Remedy Proceedings

The Law Society has considered the question of whether offers made “without prejudice save as to costs” should be considered under “conduct” when the court is assessing whether to make a costs order against a party in financial remedy proceedings.  Currently, the courts will consider any open offers made by the parties when assessing liability for costs orders. The Ministry of Justice launched a consultation in July 2019 to consider whether this should be widened to include these so called Calderbank offers.

The Law Society has provided a comprehensive response on the issue. They have concluded that such offers should be open to consideration for the purposes of costs in order to promote and encourage settlement between the parties; however, the impact that such offers may have on any resulting costs awards must be subject to the overriding considerations of the needs and wealth of the parties.

Crucially, The Law Society were clear that privileged offers should not be categorised as “litigation conduct” which may lead to costs penalties. It acknowledges that most settlements are “predicated on an assessment of needs” and any cost consequences must take that into consideration against that backdrop. For example, if a costs award against a party would significantly impact the amount received by that party to the extent that the settlement was no longer sufficient to meet that party’s needs, such an order may not be appropriate or proportionate. However, this is likely to be less important in “sharing” cases, where the settlement exceeds the party’s needs.

The Law Society have acknowledged the possible issues that may arise in practice, and as such have proposed amendments to the Family Procedure Rules to provide detailed guidance on costs. One particularly difficult area highlighted in The Law Society’s response is where one party is unrepresented, and consideration of Calderbank offers in costs assessments is too difficult and legally technical to be fully appreciated by a litigant in person. Given self-representation is on an upward trajectory following legal aid retraction, The Law Society proposes that any changes to the consideration of costs liability must be clearly explained in FPR and accessible to both LIPs and solicitors. 

Please contact Kathryn Ainsworth or Faith Widdowson if you wuold like more information about the issues raisied in this article or any aspect of family law.