Reservations have been expressed about plans to change the rules for determining costs at the end of family proceedings.
The Law Society has told rule-makers they should reconsider plans to enable so-called ‘Calderbank’ offers to be taken into account when the family court is considering whether to make a costs order.
The Ministry of Justice opened consultation on the issue in July and believes amendments to the Family Procedure Rules could encourage parties to engage more reasonably and responsibly in negotiations. Currently the court is required to take into account any open offer to settle when considering whether to make an order requiring one party to pay the costs of another party in light of their conduct.
Any offer which is not open, or an offer made ‘without prejudice’ (that is to say, a Calderbank offer) is currently not admissible and cannot be taken into account on a costs decision.
In its consultation response, the Law Society said Calderbank offers, which are clearly marked as such, should have recognition for the purpose of costs rules, but this was not an ideal solution, and more consideration should be given to other factors such as wealth, needs and the timing of such offers.
The Society said any consideration of privileged offers should not be categorised as litigation conduct, which is different and usually the subject of strong condemnation by the courts where costs have been incurred unnecessarily through the way one party has conducted themselves in the litigation.
‘We think the Family Procedure Rules 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,’ added the Society.
‘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.’
The response noted that solicitors had particular reservations about cases where one party was a litigant in person and the other is represented. Here, it was felt the complexities of Calderbank-type offers and nuanced multifaceted terms of settlement could place LiPs at a significant disadvantage.