When can I recover my legal costs in Family Law proceedings?

Generally, the rule in Family Law proceedings is that each party to the proceedings shall bear their own costs. However, the Court can depart from this rule and order that one party pay some (or even all) of the other party’s legal costs, if the circumstances justify it.

There are some specific circumstances that the Court must look at when considering whether to make a costs order:

•  The financial circumstances of the parties, including if they are receiving assistance from Legal Aid;

• The conduct of the parties throughout the proceedings;

• Whether the proceedings were brought about due to the failure of one party to comply with previous Court orders;

• Whether any party has been wholly unsuccessful;

• Any offers of settlement made throughout the proceedings.

Below are a few of the most common situations in which the Family Court will make a costs order.

1.     Where one party has been ‘wholly unsuccessful’

The concept of clear ‘winners’ and ‘losers’ is not typically applicable in Family Law. It is unusual, in litigated Family Law matters, for one party to get everything they are seeking. However, there are some circumstances where the Court will be satisfied that one party was ‘wholly unsuccessful’ in the proceedings, and for this reason will award costs to the other party.

For example, in Kearney & Dreyfus, the mother and father were in Court over a dispute about where the child should attend school. The Court found that the mother’s preferred school was the better option for the child and made orders accordingly. In these circumstances, where the scope of the proceedings was limited to a choice between two options, it was clear who had won and who had lost. The Court therefore awarded costs to the mother.

It is also possible to be ‘wholly unsuccessful’ in a more complex case – for example, in Garrod & Davenort, the father was found to have been ‘wholly unsuccessful’ where the Court ordered that he have no time or contact whatsoever with the child.

2.     Where an offer of settlement was made, and refused

Offers of settlement are routinely made multiple times throughout proceedings, in an attempt to resolve the issues without having to go through the time and expense of a trial. However, these offers have another purpose too – if Party A makes an offer to Party B, B refuses the offer, and B ultimately does worse at trial than they would have if they had accepted the offer, A can use this fact to argue that B should pay their legal costs.

A party in this position will not automatically be entitled to a costs order, but it may help, particularly where there are other factors also in play. For example, in Lad & Gittins, the wife ultimately came out of the trial $950,000 worse off than she would have been had she accepted the husband’s earlier settlement offer. Not only was this offer a significant compromise by the husband, the ultimate result was bad enough for the wife that the Court considered she had been ‘wholly unsuccessful’, and for these reasons ordered that she pay the husband’s costs.

3.     Where one party has behaved unreasonably

Costs orders can be made to punish a party who has behaved unreasonably, as well as to compensate the other party for legal costs they never should have had to pay. For example, in Garrod & Davenort, the father had falsely denied the mother’s allegations of domestic violence all the way up until a 15-day final hearing, where he eventually admitted the allegations in cross-examination. In doing so, he had not only failed to comply with his disclosure obligations, but also misled the Court and the Family Consultant by repeatedly claiming that the allegations were false. This conduct put the mother to significant, unnecessary expense in attempting to prove her story, and extended the proceedings substantially. This was one of the factors that led the Court to make a large costs order in favour of the mother.

4.     Costs orders against solicitors

In exceptional cases, the Court may order that a party’s lawyer personally pay the costs of the other party. Most commonly, this will happen where a lawyer has represented a party in bringing an action which the lawyer should have known was completely doomed to fail. These orders are discretionary, and the Court is generally reluctant to make them except in extreme circumstances.

For example, in the recent decision of Cansdall, the solicitor and barrister acting for the applicant in property proceedings were ordered to personally pay the respondent’s legal costs. The Court found that they had not only completely failed to consider whether the Court had the power to make the orders their client was seeking, but persisted with the proceedings even after it had been brought to their attention that the Court did not have that power, and that their client’s application could not possibly succeed. Both the solicitor and the barrister were also referred to the Legal Services Commission for potential disciplinary action.

This article is general in nature and is not legal advice. If you need advice in relation to family law matters, please contact us on 02 9261 1954 or use the link on our website to book a consultation.