Your ex has threatened to take you to Court and go after you for legal costs? Or you are in the unfortunate position of having to take your recalcitrant spouse to Court to have progress? Who pays the legal costs?
The general rule in the family law courts is that each party pays their own legal costs.
However, there are exceptions and circumstances that fall outside the general rule where one party may be required to pay part or all of the other’s costs.
Section 117 of the Family Law Act 1975 deals with legal costs in family law matters.
The section starts by saying that each party bears their own costs, but also says the Court may make Orders as to legal costs as the Court considers just.
Subsection 117(2A) then lists the factors the Court should consider in deciding whether to make an Order on costs, summarised as follows:-
- The financial situation of the parties;
- Whether either party is receiving Legal Aid funding;
- the conduct of the parties to the Court proceedings including, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters (have they followed Court rules and procedures);
- whether parties have complied with Court Orders;
- whether either party was wholly unsuccessful in the Court proceedings;
- any offers made by the parties and the terms of any offer;
- such other matters the Court considers relevant.
They breached an Order
Where there has been non-compliance with previous Court Orders a claim that one party pay the other parties’ legal costs would usually get the Court’s initial attention, however the assessment of whether a costs Order is made depends on weighing up all the above listed factors.
Send them a letter before applying to the Court
If the need for applying to the Court has arisen by the failure of one party to engage in any negotiations, exchange of documents, or unreasonable delay this would assist to seek costs.
The fact that the Court considers the conduct of the parties and any offers made gives good reason to attempt negotiation with the other party prior to resorting to Court proceedings.
It is imperative that prior to any application to a Court the parties’ and their lawyers should engage in correspondence to attempt resolution without needing to apply to the Court.
If you make a reasonable or favourable offer that is not accepted by the other party, and the Court considers the other party’s position to have been unreasonable, there may be an argument that they should pay some or all of your costs.
The straw that got the costs Order made
The consideration of whether to make a costs Order is a matter of discretion by the Court. This means the Court weighs up all the competing factors and can decide differently for each case. For this reason, if a party simply made an offer that was not accepted then that alone may not be enough to result in a costs Order. However, if a party in a letter makes a very favourable offer, the other party has breached a Court Order, and the other party’s position at Court appears unreasonable, then the combination of factors might mean a costs Order is made.
Because the Court may consider a costs Order if parties do not follow the Court rules and procedures correctly, it is recommended that legal advice be sought throughout the course of your Court proceedings to avoid failure to comply with Court rules developing into a situation where the other party seeks legal costs. It is worth noting however that the Court will usually give unrepresented parties some forewarning when it comes to non-compliance with rules prior to making a costs Order against them.
What about the children
The consideration of the relative financial positions of the parties is an important consideration, particularly in parenting matters. If the Court is satisfied that making a legal costs Order against a parent would have a negative financial effect on a child’s household the Court in those cases will usually not make a costs Order.
Whether you are seeking a costs Order or attempting to dodge one, it is important that all relevant information be set out in an Affidavit and filed at Court. Any information relevant to the seven (7) considerations in section 117(2A) should be included. A detailed breakdown of your income, expenses, assets, and liabilities should be provided. Copies of letters or offers exchanged by the parties should be attached.
All or some costs?
A Court can make an Order to pay legal costs on a Court Scale or the actual amount of the other party’s legal costs.
Court Scale costs are usually much less than actual legal costs, and the Court may fix costs at 100% of the Court scale or any lesser amount the Court decides as just.
The actual legal fees of the other party are sometimes called “Indemnity costs” or “solicitor and client costs”. The Court will usually only grant payment of the actual legal fees of another party in the most deserving of circumstances and the Court will need to be satisfied that the legal fees are reasonable and not excessive.
The assessment of whether there is a chance of a legal costs Order being made is something that should be done by an experienced family lawyer.
This brief article is intended to give a basic knowledge of the rules surrounding legal costs Orders in the family Courts.
Our family lawyers at McNamara & Associates would be happy to discuss this and any other aspect of your family law matter. Please do not hesitate to contact our office to arrange your first initial consultation free of charge.