It is now fairly well accepted that the rule in family proceedings is that “each party pays their own costs”. At least, it has been so since 2006 when it was incorporated into the Family Procedure Rules following judicial criticism in 2003.
Prior to this, the case of Calderbank v Calderbank 1975 set the precedent. In this case, Mrs Calderbank had made a number of reasonable offers marked “without prejudice save as to costs”, which had been turned down by Mr Calderbank and which he failed to “beat” when the case came before the Court for trial. He was ordered to pay Mrs Calderbank’s costs. In 2003, this approach was harshly criticised and after a review we were given Family Procedure Rule 28.3. Rule 28.3 includes the passage:-
“The general rule in financial remedy proceedings is that the court will not make an order requiring one party to pay the costs of another party. The court may make an order requiring one party to pay the costs of another party at any stage of the proceedings where it considers it appropriate to do so because of the conduct of a party in relation to the proceedings (whether before or during them).”
In spite of this, one of the questions I am asked more often than any other is “will my ex have to pay for all this?” Nine times out of ten the answer is no, but there are some exceptions and we have got a good track record of obtaining costs orders where the other side’s conduct warrant it under the rules.
The current situation is that costs can only be sought (successfully) from the opposing party if you can establish one or more of the following:-
Failure to comply with the Family Procedure Rules, relevant practice direction or Order of the Court;
Any open offers to settle made;
Whether it was reasonable to raise, pursue or contest a particular allegation or issue;
The manner in which a party has pursued or responded to the application or allegation/issue.
Any other aspect of a party’s conduct the Court consider relevant;
The financial effect on the parties of any costs Order.
The Judge will however have ultimate discretion in whether or not to make a Costs Order against the opponent. Sometimes, even if the factors above are established, a Costs Order is not always inevitable.
In summary, the opponent needs to have behaved very badly, and they need to have the money to pay the prospective Costs order.
The recent amendment in May 2019 to Practice Direction 28A now sees an additional obligation on the parties to assist the Court further the overriding objective, which may assist in obtaining Costs Orders going forward, where one party’s behaviour has been demonstrably unreasonably.
There is now some recent discussion amongst family practitioners about whether Calderbank offers ought to be reintroduced. Those opposed will say that it would have the potential to undermine carefully considered awards, and that the new Practice Direction needs an opportunity to “bed in”. Those who are in support of reintroducing the more harsh Calderbank approach to costs would say that given only a small number of cases end up at final Hearing, the added pressure of a potential costs sanction may indeed encourage earlier settlement.
However the debate resolves, it is clear that in the legal world there is an increasing appetite for change, and this may well make it more likely that costs will be awarded in financial remedy cases.
In spite of the current debate and division amongst Lawyers, if you require our assistance in resolving your matrimonial finances and anticipate that your former partner is not going to make it straightforward, then at any opportunity where costs may be awarded, we will advise accordingly and pursue costs robustly. If this is you, please do not hesitate to contact the Family Team and we would be pleased to assist.
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