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Calderbank isn’t dead

For most of my career as a practising family lawyer the ‘Calderbank offer’ was a very commonly used tool in the resolution, or attempted resolution, of financial remedy disputes following divorce. Much to the disappointment of many family lawyers it was abolished in 2006, but it seems that it is not quite dead after all…

For the benefit of non-lawyers (and perhaps also those who have recently qualified) I will briefly explain the concept of the Calderbank offer.

A proposal to settle a case (and here, for the sake of simplicity, I am just referring to financial remedy cases) can either be an ‘open’ proposal or a ‘without prejudice‘ proposal. An open proposal can be shown to the court, by either side, which means that the party making the proposal is committed to it and cannot withdraw it and then seek more. A without prejudice proposal, on the other hand, cannot be shown to the court, unless the proposal is accepted. Accordingly, the maker of the without prejudice proposal can still seek a better settlement at court if the proposal is not accepted.

The Calderbank offer (named after a 1975 case of that name) is a proposal that is made without prejudice save as to costs. This means that if the proposal is not beaten by the other party then the maker of the proposal can show the proposal to the court and request the court to order the other party to pay their costs from the date of the offer, on the basis that those costs would not have been incurred if the offer had been accepted.

However, the Calderbank offer was abolished when new costs rules were introduced in 2006. Open offers were to become the norm and the starting point in all financial remedy cases is that there should be no order as to costs – i.e. each party should pay their own costs.

As I indicated above, the Calderbank offer was popular with many family lawyers. Indeed only recently Resolution, the association of family lawyers, debated whether it should be reinstated and fifty per cent of those who took part in the debate said that it should.

But a judgment published the other day (although handed down back in April) indicates that we have not seen the last of Calderbank offers (at least in respect of financial remedy claims) after all.

WD v HD concerned an appeal by a wife against the variation of a maintenance/school fees order. I don’t need to go into the details of the case here, but the issue arose as to whether or not a Calderbank offer is admissible in relation to an appeal. Considering the matter, Mr Justice Moor looked at the current costs rules, which say that no offer to settle which is not an open offer to settle is admissible at any stage of the proceedings (except as provided in relation to financial dispute resolution hearings). He concluded that the rule only referred to first instance proceedings, and therefore did not apply to appeals. A Calderbank offer is therefore admissible in relation to an appeal.

Mr Justice Moor added the important point that: “By coming to that conclusion, there is the added advantage that litigants are able to protect themselves in appeals where the costs of the appeal can be totally disproportionate to the amount at stake.”

So, reports of the death of Calderbank offers in relation to financial remedies cases were, it seems, premature. On the other hand whether we will see their full return (as many would like) is, on the other hand, another matter.

The full report of WD v HD can be read here.

The blog team at Stowe is a group of writers based across our family law offices who share their advice on the wellbeing and emotional aspects of divorce or separation from personal experience. As well as pieces from our family law solicitors, guest contributors also regularly contribute to share their knowledge.

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