Calderbank Offers4 Sep 2019 | Lisa Pepper
The Resurrection of Calderbank Offers
When a couple divorces, they are encouraged by the Courts to consider other dispute resolution options such as mediation: before embarking on expensive financial proceedings at Court to settle their financial separation.
Cost Statements for Financial Proceedings on Divorce
If instead, the parties end up in financial Court proceedings on divorce, at every hearing they are both required to provide each other with costs estimates (Form H) and 14 days before the Final Hearing, a more detailed costs estimate (Form H1). These Forms can be found on the Court Service website. They focus everyone’s minds on the costs incurred as the proceedings continue (frequently the costs double between each hearing).
What is a Calderbank Offer?
In financial proceedings at Court, until April 2006, Calderbank offers could be made. In April 2006, Rule 2.71 was introduced into the Family Procedure Rules 1991 (as they then were) bringing in the current No Order as to Costs presumption, later maintained in the Family Procedure Rules 2010. These rules are the framework in which the lawyers, the Judges and the clients must work within the Court.
A Calderbank offer was an offer of financial settlement made “without prejudice save as to costs”. Other than at the Financial Dispute Resolution Hearing, the Judge hearing the case would not be allowed to be told what that offer was. The sting in the tail was where the Court decides the case at the final Financial Hearing (many cases settle before this). If the case fights all the way to a final hearing, and if, say, the husband had made a Calderbank offer to the wife, which she refused, and the Judge awarded her less than the husband’s offer, then she was at risk of paying the husband’s costs from 28 days after the offer was made, on top of her own. This used to put quite a lot of pressure on a party receiving a Calderbank offer to consider it seriously and to be quite confident before they continued their case through the Courts, seeking more.
The Family Procedure Rules Committee Costs Working Group has launched a consultation seeking views as to whether the 2010 Family Procedure Rules should be amended to take into account Calderbank offers as conduct when the Court is considering making an order requiring one party to pay the costs of the other party. A link to the consultation can be found here.
Current position on costs
The current rule on costs is under Family Procedure Rules 2010 r 28.3 This sets out the issues the court should have regard to if it is to make a costs order:
- Failure to comply with the rules, an order or relevant practice direction
- Any open offer to settle
- Whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue
- The manner in which a party has pursued or responded to the application or a particular allegation or issue
- Any other aspect of a party’s conduct in relation to the proceedings that the Court considers relevant
- The financial effect on the parties of any costs order.
It’s not back to the old days
Taking into account Calderbank offers as conduct, is not as “black and white” in terms of costs penalties as the old rules, which provided that (my emphasis): “the court must unless it considers unjust to do so, order that other party to pay any costs incurred after the date beginning 28 days after the offer was made”.
The change would not mean that the general ‘no order’ rule set out in FPR 2010 r.28.3(5) should change or be deleted. The consultation states that “in this way, excessive weight ought not to be attached only to whether one party has ‘won’ or ‘lost’ but proper account could be taken of whether either party has acted reasonably or unreasonably in the course of their negotiations (including those undertaken “without prejudice save as to costs”) having regard to all of the matters to which the court is required to have regard under FPR 2010 r.28.3(7) when deciding whether it is ‘appropriate’ to make an order requiring one party to pay the costs of another party having regard to ‘conduct of the party in relation to the proceedings’ under FPR 2010 r.28.3(6)”.
The national member organisation consisting of family lawyers and other professionals committed to the constructive resolution of family disputes has also asked for its members to complete a survey on the matter, a link to which can be found here.
If the spirit of Calderbanks is introduced to the costs rules it will be interesting to see if this leads to the earlier settlement of financial cases on divorce in Court.
Speak to us about Calderbank Offers
For a free initial conversation call 020 7485 8811
Email us Send us an email and we’ll get back to you
Insights from our Divorce LawyersVIEW ALL
Breadwinner or homemaker in divorce. Does it matter?
When agreeing on a financial settlement, does it matter if you’re a breadwinner or a homemaker? When it comes...Read more
Are trusts protected from divorce?
Can trusts protect an inheritance from your spouse? A trust is a separate legal entity. Neither spouse owns its assets. ...Read more
Is a limited company protected from divorce?
Is my spouse entitled to half of my business? If you are involved in running a limited company, then it...Read more
How is a pension split in a divorce?
Pensions and Divorce In a divorce, pensions are taken into account together with all other financial assets. Once all assets...Read more
Who gets the house in a divorce?
How is a house divided in a UK divorce? For most people thinking about getting a divorce, one of the...Read more
How to set aside an order in financial...
My ex-spouse didn’t tell the truth about their finances when we divorced, can anything be done? Can the financial...Read more
Pension sharing on divorce
What is the new procedure for pension sharing? Pensions are one of the biggest assets of a marriage, yet many...Read more
My ex has cut me off during divorce
Can my spouse cut me off financially? Unfortunately, it is far too common that when clients say it’s over,...Read more
How the Court views loans from parents during divorce A frequent issue in financial divorce cases is a loan from...Read more
Mesher Orders Explained
What is a Mesher order? A Mesher Order allows the sale of the family home to be postponed in the...Read more
Financial Dispute Resolution (FDR) for Divorce
What is FDR for Divorce? Traditionally, a divorce financial settlement is dealt with by mutual agreement between the parties or...Read more
Negotiating financial settlements in divorce
Costly and acrimonious divorces: a lesson in what not to do If you’re determined to pursue your financial claims...Read more
Uncovering hidden assets in your divorce
Hiding Assets During a Divorce As part of your divorce, you and your ex will have to agree on dividing...Read more
Case Law Divorce Settlement
6 cases that shape your divorce settlement Part of what makes our divorce lawyers experts in their field is knowing what...Read more
Does Divorce Revoke A Will?
Divorce and Wills In the midst of a divorce or separation, it’s rare for couples to think about making...Read more
Beneficial Interest in Property
Andrew Watson, a London-based divorce lawyer in our family department and Resolution accredited cohabitation lawyer, summarises the law in relation...Read more
Divorce in your 60s – The Financial Implications
How common is a divorce in your 60s? The latest divorce figures from the Office of National Statistics (ONS) show...Read more
Tax and Divorce
Tax implications for divorcing couples As the end of the Stamp Duty holiday looms on 31 March 2021, that is not the...Read more
The Resurrection of Calderbank Offers When a couple divorces, they are encouraged by the Courts to consider other dispute resolution...Read more
My spouse is going bankrupt. Will it affect...
Bankruptcy is on the rise in the UK. In 2022, more than 1 in 10 businesses reported a moderate-to-severe risk of insolvency. More...Read more
Self-Help in Financial Remedy Proceedings
One of the first things we explain to clients who are getting divorced is that, when it comes to financial...Read more
Effect of Delay on Financial Relief Claims: Vince...
Wyatt v Vince This unusual case demonstrates the risks of failing to bring a financial claim on divorce promptly, or,...Read more
Supreme Court Hands Down Judgement in Mills v...
Supreme Court hands down judgement regarding Spousal Maintenance Payments. The Supreme Court today handed down judgement in the case of...Read more