David Gawthorne is a Senior Solicitor at Mullane & Lindsay in Newcastle and an Accredited Specialist in Family, Relationship and Matrimonial Law
It is common across many different kinds of litigation for the usual order in relation to the costs of the proceedings to follow the result. That is, the party to a court case who succeeds in their claim, or defence of a claim, as against the other party is usually entitled to have their legal costs paid by that unsuccessful party. To be precise, the successful party will be entitled to having a substantial part of their total legal bill paid by the other party, known as “party/party” costs.
The cost of litigation is an important factor to take into account when considering whether to commence court proceedings, or to continue negotiating with the other party to a dispute in the hope of reaching an agreed outcome. The likelihood of succeeding with a claim or a defence, and of then being granted a costs order, has an obvious impact on this potential expense. Conversely, the risk that the other party will succeed and be entitled to have their party/party costs paid must also be factored in to any cost/benefit analysis.
It is significant, therefore, that the usual order in relation to costs in Family Law cases is not that costs follow the result. The starting point for costs in relation to litigation under the Family Law Act 1975 (i.e. in relation to parenting, property settlement, maintenance and other miscellaneous applications involving disputing parties) is that each party bears his or her own costs. It is only if there are circumstances that justify it that a Family Law court may make a costs order in favour of a party. These circumstances include: the complete financial circumstances of each party; whether any party is in receipt of Legal Aid; the way that the parties have conducted their case (including as to whether they have followed the rules of the court and made full and frank disclosure of all relevant information, as required); whether the proceedings arose from a failure of a party to follow previous court orders; whether a party has been wholly unsuccessful with their case; and where the successful party has made reasonable offers, in an attempt to bring an end to the dispute, that have been rejected by the unsuccessful party.
Until recently, there was one notable exception to the usual order in Family Law cases. If the Court was satisfied that a party knowingly made a false allegation or false statement in the proceedings then the Court was required to order that the party was to pay some or all of the costs of the other party to the proceedings. However, as part of the changes that commenced on 7 June 2012 to improve the response of Family Law courts to allegations of Family Violence, this exception was removed. It was thought that the extra risk of a cost order where a party was making allegations of Family Violence that might be found by the Court to be false was dissuading people from making genuine allegations.
As parties to a Family Law dispute will, therefore, usually bear their own costs, there is an even greater imperative than in most other areas of law for parties to attempt to reach agreement as early as possible. Experienced Family Lawyers carefully weigh the need for assistance from a Family Law court against the prospects for a negotiated outcome that avoids substantial litigation costs, even when the parties first seem far from reaching agreement.
David Gawthorne is a Senior Solicitor at Mullane & Lindsay, and practises extensively in Family, Relationship and Matrimonial Law. If you require any assistance in this area please contact David Gawthorne to arrange a consultation or contact our Newcastle office.