The rules governing costs in ancillary relief proceedings in divorce cases are facing their biggest shake up in over 30 years, the Department for Constitutional Affairs (DCA) announced in a consultation paper last week.


The DCA plans to scrap the Calderbank system that was launched in the 1970s as a way of encouraging parties to focus on reasonable terms through sealed offers. A 'no order for costs' principle - which will enable the court to include consideration of costs as part of the overall settlement of the parties' financial affairs - will be applied in its place.



The consultation paper pointed to a number of problems with the current costs regime in ancillary relief proceedings, including the 'destabilising effect' costs can have on financial settlements that have been carefully constructed by the court. The system of closed offers has also introduced a degree of procedural gamesmanship and 'an undesirable element of gambling' into ancillary relief proceedings, it said.


A third problem identified was that the making of costs orders tends to generate satellite litigation that can be contentious and costly.


The consultation paper also proposed that the system of allowing circuit judges to hear appeals from an order for ancillary relief by a district court should end, on the grounds that many do not


have experience of complex divorce cases. From next year, only High Court judges will hear such appeals.



The DCA's proposals were welcomed by Nigel Shepherd, former chairman of the Solicitors Family Law Association (SFLA), who said opposing parties, especially in London, were trying to use the sealed offers under Calderbank 'strategically' to increase their settlements.



Mr Shepherd said the move was very significant, as it was 'a complete change of emphasis' in the ancillary relief system. 'This shifts the burden of proof onto the person who wants the money,' he said.


He added that, overall, the SFLA supported the changes as they were in the spirit of seeking settlements more effectively, although he stressed that the group had not yet formally responded as part of the consultation process.


Family justice minister Baroness Ashton said: 'These new rules stress to divorcing couples, and their legal advisers, that unreasonable behaviour in court will serve only to reduce the assets available to them after the divorce.'