Ex-files with Jeremy Sutton: Who pays the costs in Family Court cases?

Children are the losers when parents fight over them in the Family Court. Photo / 123rf

OPINION

Many clients are unaware of the position around costs in Family Court proceedings. If you lose in the proceedings, a judge has the discretion to order that you pay the other’s party’s legal fees.

Care of Children Act 2004

In cases about children, the judge will sometimes not usually make any costs order. Both parties just cover their own legal fees. The rationale is that the judge is making an order that they consider to be in the best interests of the child rather than selecting one party as the “winner.”

Both parties are normally required to contribute a third of the costs of the lawyer for child and any psychologist appointed to prepare a specialist report. This requirement does not apply to a party that has a grant of legal aid.

But often costs are ordered on the basis of a prescribed scale which is designed to provide certainty and equates to an award of about two-thirds of the actual legal costs.

Property Relationships Act 1976

In relationship property proceedings a costs order will usually be made against the party who has lost. It is ultimately at the judge’s discretion though.

In relationship property proceedings it is not uncommon for there to be several issues in contention. A party may have a favourable outcome on one issue and “lose” on another issue. The judge would weigh all these factors up in their decision about costs.

Costs are calculated not only for the actual hearing days, but also for the lead-up to the hearing e.g. legal fees for filing the proceedings, any procedural court appearances leading up to the hearing and preparation for the hearing. A costs award will also cover disbursements.

Usually, the costs order will only reimburse the successful party for only a portion (roughly two-thirds) of their actual legal fees.

Negotiation

Often, after delivering their final judgement, a judge will request that the parties try to reach agreement themselves about costs. If this happens, to avoid further litigation you and your lawyer should critically assess to what extent you have won or lost in the proceedings. It would be helpful to then base the negotiations on the daily recovery rates set out in the legislation.

Calderbank offers

Usually, parties will exchange written settlement offers prior to a hearing to try and settle the case out of court. Often these will be marked “without prejudice save as to costs.” This signals that if you do not accept the offer and the matter proceeds to a hearing and you lose, the other party will invite the judge to consider the fact that you turned the offer down when they are exercising their discretion whether to award costs. For this reason, you should carefully consider any settlement offers presented.

Settlement of cases prior to the conclusion of a final hearing

Costs orders are only made at the end of a hearing when the judge has delivered his or her final judgment. Fortunately, most Family Court cases do not reach this conclusion and are settled prior to (or during) a hearing. Where this happens both parties usually agree to forgo any costs as part of the settlement. This is appropriate as there is always “litigation risk” for both parties in continuing with the litigation.

Security for costs

If you are appealing you are required to pay a prescribed amount in a strict time frame.

Legal aid

The lawyer must notify the court and other parties that legal aid has been granted. The only way costs can be awarded against a legally aided individual is if there are exceptional circumstances. Costs are rarely awarded against a legally aided party.

Summary

Most parties think only of their own legal costs when considering their strategy for a case. You need to weigh up all of your exposure to costs including meeting a costs award in relation to the other party if you are unsuccessful.

Jeremy Sutton is a barrister and family lawyer at Bastion Chambers.