Open negotiation or an order for costs


29 May 2019

Prior to 27 May, it would be a rare occurrence for the Court to make an order for costs against one or both parties that were involved in financial remedy proceedings, i.e. proceedings to resolve the financial element of a divorce between parties where they could not negotiate or resolve matters between themselves. 

The Court would normally follow the 'no order for costs' rule, but the Court was required to 'have regard' to conduct of the parties within those proceedings. Such conduct was normally of the most serious nature which would warrant a Judge to make such an order for costs.

However, from 27 May, the Court is able to take a much broader view of conduct. If either party refuses to openly negotiate, in a reasonable and responsible way, the Court will view it as conduct in respect of which the Court will consider making an order for costs. As the Court's consideration is focussed on costs, it will be concerned if a party has, in the Judge's view, conducted proceedings in an unreasonable way which has resulted in costs being incurred by the parties which are disproportionate to the award that has been made by the Judge. This is even in cases where one or both parties are saying that their case is based on their needs. Needs cases are where one or either party says that they need a settlement of a certain amount, in order to meet their ongoing income and capital needs going forward. Inevitably in such cases, more often than not, the parties have differing views as to what the reasonable needs of the parties are, and it is left to a Judge to resolve the issue at a Final Hearing. At that point the parties may have incurred thousands of pounds in legal costs. There has also been clear guidance issued that states that the Judges are not required to take into account the amount that one party has been ordered to pay as costs, on an interim basis, as a debt/liability in calculating what the value of the assets is.

Therefore your solicitor at Birketts will be able to guide you as to what would or would not be relevant conduct issues to take into account when involved in financial remedy proceedings. This may at times mean that you are given advice that you do not like, but ultimately it is for your benefit. Our solicitors always seek to give you legal advice that is aimed at assisting you in resolving matters without a final hearing taking place, which in turn has the effect of potentially saving you legal fees. It is not always possible to settle matters in this way, as it of course requires both parties to engage in the negotiating process, but your solicitor will certainly give you a range of options to consider at all times. 

Another change that came into effect from 27 May, is a pilot scheme that allows certain applications to be made online, for a financial remedy in connection with certain proceedings for a matrimonial order. The Government has rolled out a number of pilots in the matrimonial and family courts over the last few years, as it recognises that people are relying on the Courts to process and resolve issues and disputes that arise in their personal lives. Due to the volume of such cases the Courts and the Court system has come under increasing pressure to manage many issues, including Court budgets and resources, but also ensuring that people who are accessing these services are able to receive a good service. The online options, inevitably intend to speed up the administration that is involved in issuing and processing applications. As it is a pilot scheme that has only recently come into effect, time will tell if it has the desired effect and outcome intended by Government. 

At Birketts we have a large team that can assist in advising you on legal issues arising from a relationship or marriage breakdown, or indeed we can assist you in relation to living together agreements and also pre-nuptial agreements. Please contact Ivana Radovic, Senior Associate on 01245 211289 or [email protected].