Costs in financial proceedings after divorce

We have often mentioned the need for parties to adopt a reasonable attitude when sorting out finances after a divorce. The consequences of not doing so could include a court order that the party who has acted unreasonably must pay the costs of the other party.

Background

For most people separation and divorce is very difficult and stressful. It is also a time when emotions can run high, often combining resentment, anxiety about the future, financial uncertainty and concern about and for the children. Taking important decisions which are likely to have long term effects is difficult.

Many couples, in fact the majority, are able to reach an agreement about the arrangements for the future. Some do so by discussing and agreeing matters between themselves, although even then we would always advise, except in the very simplest of cases, that a lawyer is asked to advise of the fairness of the agreement. There are certain financial aspects which are very complicated (e.g. pensions and anything other than the smallest of inheritances). Other couples find that their solicitors are able to forge a solution which is acceptable to both parties. In some cases, mediation is a good option, as is the procedure adopted when lawyers, with the agreement of their clients, act in what is known as a ‘collaborative’ way. However, with the best of intentions, or sometimes the worst, some cases end up in court.

Court proceedings

It is not intended in this piece to discuss the procedure which applies when cases go to court, except in one respect. The law relating to the outcome of court proceedings concerning the sharing of finances after separation and divorce is very clear. What it is not is a battle or contest to see who ‘wins’. What has to be decided is the fairest way for the available finances to be shared to take account of a number of factors which are set out in an Act of Parliament, as they have been applied in very many cases. In the search for that fair outcome, the law also requires both parties to behave in a straightforward and honest way, disclosing to the other party and to the court everything that is relevant to the decision that has to be made. Once the court has arrived at that decision, it is sometimes the case that one party seeks a court order that the other party should pay the whole or part of their legal costs of the proceedings.

Court orders for costs in financial proceedings

The starting point is that the court will not order either party to pay or contribute to the costs of the other party. However, the law states that the court ‘may’ make such a costs order ‘where it considers it appropriate to do so because of the conduct of a party in relation to the proceedings, whether before or during them’.

The factors that the court will consider when making a costs order

The following are relevant to the decision of the court on whether or not to make a costs order:-

• Any failure to comply with court rules or order
• A failure to make or to accept a reasonable offer to settle a case
• Unreasonable pursuit of a particular point
• The way in which a party has behaved in conducting the case
• Any other part of the conduct of a party e.g. threats or aggression or a failure to negotiate to try to find a settlement.
• The financial consequences of the making of a costs order.

Conclusion

However hard it is and however aggrieved a party may feel about the breakdown of the relationship or any of the consequences of it, the best advice is -

Adopt a reasonable, fair and balanced approach to the procedure to resolve outstanding issues, particularly finances and the arrangements for the children.

If you or anyone you know, are affected by the issues raised above and would like more information or some preliminary, confidential advice, please contact one of our experienced experts in our Family team by email or telephone. Exeter +44 (0)1392 688688 Sidmouth +44 (0)1395 512515