The obligation on parties to negotiate openly and reasonably within financial remedy proceedings – and the consequences of not doing so – are well known.

They were perhaps set out most clearly in OG v AG [2021] 1 FLR 1105 per Mostyn J:

‘[31] It is important that I enunciate this principle loud and clear: if, once the financial landscape is clear, you do not openly negotiate reasonably, then you will likely suffer a penalty in costs. This applies whether the case is big or small, or whether it is being decided by reference to needs or sharing.’

This reflects the amendments to FPR PD 28A para 4.4 which came into effect on 27 May 2019 when inter alia the following was added:

The court will take a broad view of conduct for the purposes of this rule [i.e. r 28.3(6) and (7)] and will generally conclude that to refuse openly to negotiate reasonably and responsibly will amount to conduct in respect of which the court will consider making an order for costs.

In LM v DM (Costs Ruling) [2022] 1 FLR 393 Mostyn J observed at [1] that the obligation to negotiate openly and reasonably ‘is especially important in interim applications’. This was the case notwithstanding that PD 28A para 4.4 technically applies solely to r 28.3 cases. He was therefore clear at [4] that ‘Litigants must learn that they will suffer a costs penalty if they do not negotiate openly and reasonably’.

The Family Procedure (Amendment) Rules 2020 (SI 2020/135) introduced a new r 9.27A as a consequence of which there is a duty to file and serve open proposals for settlement within 21 days after a Financial Dispute Resolution Appointment which does not result in a consent order or direction for a further FDR Appointment. The period can be extended or shortened by the court. There is every reason to consider that this rule should also be read as applying to Private FDR Appointments. If no FDR Appointment takes place, the open proposals must be made not less than 42 days prior to the final hearing. Again, the period can be extended or shortened by the court. The duty to make open proposals before a final hearing (no later than 14 days before the hearing by the applicant and no later than seven days thereafter by the respondent) remains.

The move to give open offers ‘teeth’ in relation to costs is one reason (and perhaps the principal one) why neither the government nor the FPRC have (at least to date) been persuaded of the merits of reintroducing Calderbank offers as being admissible at final financial remedy hearings (they of course are admissible at interim hearings, appeals and any other proceedings not governed by FPR 28.3).

Notwithstanding the above rules – and in particular r 9.27A – it is often thought that open offers will define the boundaries of the court’s decision-making process and that the court will inevitably ‘middle’ the open offers. This may be why r 9.27A is arguably honoured more often in the breach than the observance.

However, courts have been clear that the open offers will not necessarily influence the award.

In MAP v MFP (Financial Remedies: Add-Back) [2016] 1 FLR 70 Moor J stated:

‘[87] Now that we no longer have Calderbank offers, litigants must be encouraged to make open proposals as early as possible that are designed to encourage settlement. If the other party spurns such an offer, the court is entitled to ignore it completely and decide the case entirely on the merits. I will have no hesitation in a suitable case in awarding an applicant more than an open offer he or she has made if that is justified.’

More recently and to similar effect in LMZ v AMZ [2024] 2 FLR 735 Moor J stated:

‘[41] Both parties have made two open offers each. It is pertinent to note that their respective positions have moved further apart rather than closer together from the first to the second of such offers. I do not criticise this. I accept that it is entirely legitimate to say, in a first offer, that the offer is more generous than the court will award so it should be accepted, followed by a second offer in which the litigant says that, as it was not accepted, this is now the litigant’s position. Indeed, this is the only way to deal with the inability of parties to make Calderbank offers, which I have to say I find so regrettable in these big money cases.’

Perhaps less well known is the view expressed in JS v RS [2016] 2 FLR 839 – Sharp at first instance – where at [60] Singer J considered ‘another circumstance’ to which he was entitled to have regard under MCA 1973 s 25 but ‘not [one] which so far as I am aware or can recall has assumed prominence in reported decisions’. It was this proposition: if one party puts forward a coherent case for an outcome less advantageous to herself or himself, is the court in any sense under an obligation to make a higher order in line with what the court regards as that individual’s entitlement upon principled application of the relevant provisions and considerations? Singer J answered this question as follows:

‘[61] The answer must surely be “no”. The concept of individual autonomy must encompass not only the right of an adult party to settle for less than the court would award him or her, but also the right to invite the court to resolve a dispute by ordering less than it otherwise might. A party may often have his or her own notion of what is the fair outcome and that may be based upon or influenced by factors wholly unknown to the judge, and beyond the judge’s perception or indeed even his or her understanding. But there can surely exist no embargo on the court’s ability to award an adult and competent party less than the court regards as that party’s entitlement.’

It is arguable that in Clarke v Clarke [2023] 2 FLR 1 Mostyn J took a different view. His comments were made in the context of an appellant litigant in person having at [27] ‘shown little interest’ in seeking to pursue an argument that the judge erred for not allowing a higher figure than £26,000 net income per annum for life and hence raised the question of how much encouragement the court should give to a litigant in person to take the right points and eschew the wrong ones. However, his conclusion – which allowed him to conclude that the judge had fallen into error when he determined such a figure – may be said to have been expressed (at least in part) more generally:

‘[30] … in a financial remedy case the court exercises a quasi-inquisitorial function. It would be a dereliction of its inquisitorial duty if it allowed a case to be decided under procedural rules and customs which prevented a just decision being rendered on a particular set of facts because a litigant-in-person has, for whatever reason, chosen not to advance the relevant arguments applicable to those facts.’

Subject to the decision of Clarke v Clarke, however, the current position may perhaps be expressed as this: a court may if justified award a party more than their open offer seeks but may also award a party less than the court regards as their entitlement if that is what their open offer seeks.