Consultation in relation to the treatment of Calderbank offers when determining issues relating to costs

Closes 31 Oct 2019

Calderbank offers: history

The FPRC is now considering the question of if/how offers made “without prejudice save as to costs” (i.e. Calderbank offers) might be taken into account when the court is deciding whether to make an order for one party to pay, or contribute towards, the costs of another.

The provisions now contained in FPR 2010 r.28.3 were first introduced in the Family Proceedings Rules 1991 (‘FPR 1991’) in 2006 (FPR 1991, r 2.71, inserted by SI 2006/352 from 3 April 2006). The introduction of the general ‘no order’ rule followed widespread concern about the operation of the previous costs rules, in particular in relation to offers made ‘without prejudice except as to costs’ (i.e. Calderbank offers).

Specific provision for such offers was first made in the 1991 Rules by the addition of FPR 1991, r 2.69 with effect from October 1992. The rules were subsequently amended in June 2000 (by SI 1999/3491) to introduce provisions designed to give greater effect to Calderbank offers. As they stood in 2005, the FPR 1991 provided something of a “cliff edge” – where a judgment or order was more advantageous to a party than an offer made without prejudice except as to costs by the other party, FPR 1991 r.2.69B(2) provided that “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”.

Those provisions gave rise to further difficulties and increased calls for reform. A detailed history of the procedural changes and ensuing difficulties was set out by the Court of Appeal in Norris v Norris, Haskins v Haskins [2003] EWCA Civ 1084 (see particularly the judgment of Thorpe LJ at [63]-[64]).

The changes suggested in Norris were considered by the (then) Ancillary Relief Advisory Committee of the Family Justice Council. Following extensive discussion and consultation, the group recommended that Calderbank offers should be excluded from consideration in determining whether the conduct of a party justified the making of a costs order under the new rules.

Under the current provision in the FPR 2010, although offers made partly or wholly ‘without prejudice’ or ‘without prejudice save as to costs’ may (indeed must) be referred to at an FDR, no offer to settle which is not an open offer to settle is otherwise currently admissible at any stage of the proceedings (FPR 2010 r.28.3(8)), and accordingly Calderbank offers do not currently fall to be considered as ‘conduct’ when the court considers whether or not to make an orders for costs under FPR 2010 r.28.3(6) and (7).