Costs in Family Law

Unlike in other Courts where costs usually follow the event, under the Family Law and Family Court Acts there is a presumption that each party to the proceedings is to bear their own costs.

This legal presumption creates the position from where the Court must start when assessing an application that one party pay the other party’s legal costs. The presumption shifts the burden onto the party seeking costs to satisfy the Court of some reason (usually the other party’s conduct) as to why they should move away from the ordinary course of things.

The Court can consider a very broad number of circumstances when deciding if costs might be awarded under section 114UB(2) of the Family Law Act, and, for de facto couples in Western Australia, under section 237(2) of the Family Court Act.

If the Court is of the opinion, after considering section 114UB(3) or 237(3),  that there are circumstances that justify it in doing so, it may make any order for costs that the Court considers just.

Therefore, a party applying for a costs order will usually need to satisfy the Court of some unusually belligerent conduct of the other party, that has caused a circumstance where the applicant has been unreasonably put to additional legal cost, and for that reason the Court should not apply the presumption.

Self-represented litigants, even if they are a practising lawyer, are not entitled to seek to recover any costs for any work they have done in connection with their own matter.

The family law legislation sets a scale for legal costs in the rules of each court.

Most clients who engage private law firms enter into cost agreements to pay their lawyers above the scale of costs prescribed by the legislation.  Some costs orders use the scale of costs when assessing what must be paid, others the actual costs paid in accordance with the cost agreement.

The usual bases upon which a Costs application is made the Court are:

• On an indemnity basis, being almost all costs incurred by the successful party in bringing the costs application pursuant to the costs agreement with their lawyer; or
• Solicitor/client basis, being less than on an indemnity basis but higher than on a party and party basis, this often equates to virtually all the persons costs but at the scale rate rather than the rate they paid; or
• Party/party basis, this is limited to the costs associated with dealing with the other party and does not include all of the costs of a party instructing their own lawyer and is usually assessed at the scale rate; or
• In a fixed amount, being a specific value that the Court decides is just in the circumstances; or
• No costs.

The award of costs on an indemnity or even solicitor/client basis at rates in cost agreements are rare occurrences, meaning generally even a successful application for costs will most likely mean the applicant will not recover all the monies which they have incurred.

If a fixed amount is awarded then the losing party will be liable for the fixed amount, however, the other type of costs orders may result in a taxation to determine if the lawyer’s costs were reasonable in the case.

Lastly, if a party is successful in being granted a costs order in family law, it is likely not because they, or their lawyers did something correct, but rather because of belligerent behaviour of the other party; over which the party, or their solicitors, had no control.

If both parties do the procedurally “right thing” and do not pursue a completely unrealistic outcome, causing the other party unreasonable expense, regardless of the outcome it is unlikely either party will receive a costs order in family law cases, even more-so for a parenting matter.

Parties should keep this in mind when attempting to arrive at an agreed resolution earlier rather than later in proceedings.

Disclaimer

Please contact us if you require further information about this.

This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.