When it comes to family law proceedings in England and Wales, one of the most commonly misunderstood areas is the issue of costs orders, which includes who pays for what, and under what circumstances. Family courts tend not to follow the usual loser pays principle as in other areas of civil law; instead, the approach is far more nuanced, guided by fairness, the parties conduct, and the overall nature of the proceedings.

But what are the general rules surrounding costs in family law, and when might a costs order be made? How does timing, wealth, or settlement affect it?

What is a costs order?

A costs order requires one party to pay some or all of the other party’s legal costs. As mentioned above, in other types of civil litigation, such as commercial or personal injury claims, the losing side almost always pays the winner’s costs. But in family proceedings, the position is quite different.

Under Rule 28.3 of the Family Procedure Rules 2010, the general rule in financial remedy proceedings is that each party bears their own costs, regardless of the outcome. This principle is rooted in the idea that family cases, particularly those involving finances or children, should not be treated like battles to be won or lost. Rather, the focus is on resolution and fairness, not punishment.

That said, in certain circumstances the court has the power to depart from that general rule and make a costs order. This often arises from the conduct of one or both parties, either during the proceedings or before them.

The general rule: Each pays their own

In most family law cases, such as divorce financial settlements, child arrangements, and other applications under the Children Act, each party will be responsible for paying their own solicitor and barrister fees.

This is because family law disputes are often emotionally charged, and punishing one side financially could undermine the principle of fairness, especially where both parties are doing their best to reach an agreement. The court recognises that the process itself can already be financially draining, and adding the burden of paying the other party’s costs could cause undue hardship. Despite this, the each pays their own rule is not absolute. The court has wide discretion to make a different order where it feels appropriate.

In what circumstances might a costs order be made?

The court may make a costs order where a party’s conduct in the proceedings has been unreasonable or obstructive. This can cover a range of behaviours, including:

  • Failing to negotiate sensibly or reasonably: The courts expect parties in family proceedings to engage in open, genuine attempts to settle matters. A refusal to consider reasonable offers or to attend mediation can be seen as poor conduct.
  • Non-disclosure of assets or misleading the court: If a party hides financial information, undervalues assets, or deliberately misleads the court, it may result in a costs order being made against them. You should always keep in mind that transparency is a key duty in financial remedy proceedings, and that applies to both parties.
  • Abuse of process or unnecessary applications: Repeatedly bringing applications without substance or merit, or dragging the case out to increase the other side’s costs, may justify a costs order.
  • Failure to comply with court directions or deadlines: If one party persistently ignores court timetables, fails to file documents on time, or causes hearings to be adjourned, the court may compensate the other side through a costs order.
  • Conduct during the litigation: This includes aggressive correspondence, failure to respond, or general behaviour that frustrates the progress of the case.

It is important to remember that a costs order doesn’t require bad faith, and simply being unreasonable or obstructive may be enough.

How are costs assessed?

When deciding whether to make a costs order, the court considers all the circumstances of the case, including the conduct of the parties, any offers made, and whether it was reasonable for the case to proceed as it did.

If an order is made, the amount payable can either be:

  • Summarily assessed at the end of the hearing (usually for shorter hearings), or
  • Subject to detailed assessment by a costs judge (for more complex cases or lengthy hearings).

The court could order payment of:

  • All the costs
  • A specific proportion (e.g., 50%), or
  • Costs limited to a particular issue (for instance, the costs of a vacated hearing)

Can a costs order be disputed or overturned?

A party can challenge or appeal a costs order if they believe it was wrongly made. Common grounds include, but are not limited to, the following:

  • The judge failed to properly consider the conduct of both parties
  • The decision was disproportionate to the alleged misconduct
  • New evidence has come to light that changes the context of the order

It should be noted that appealing a costs order is far from straightforward. The appellant must show that the judge has exercised their discretion wrongly or unfairly, which is an incredibly high threshold. The appeal courts are reluctant to interfere unless the decision was clearly outside the reasonable range.

Does it matter when costs are applied for?

Usually, the court considers costs at the end of a hearing or trial; essentially once all the evidence has been presented. However, a party can apply for a costs order at any stage if the other side’s conduct justifies it; for example, after an unnecessary interim hearing caused by missed deadlines or non-compliance.

The Family Procedure Rules require that a party seeking a costs order must file and serve a statement of costs before the hearing (typically 24 hours before). Failure to do so can weaken the application.

Can costs come out of the settlement?

The court may take into account any costs incurred when deciding the final division of assets. For instance, if one party’s unreasonable behaviour has significantly increased costs, the judge may award a larger share of the assets to the other party to rebalance fairness.

Alternatively, the court may order direct payment of costs from one party to the other, which could be funded from their share of the settlement. However, this depends on the individual circumstances, the nature of the assets, and the overall fairness of the result.

Can wealth or lack of it affect the decision?

If one party is significantly wealthier, a costs order may be more likely to be made against them, especially if they have used their financial advantage to prolong proceedings or pressure their ex-spouse. On the other hand, where a party has limited means, the court may hesitate to impose a costs order even if their conduct was questionable, to avoid causing them financial hardship.

Overall, the guiding principle for the judge remains fairness and proportionality. The court’s aim is not to punish or impoverish, but to achieve a fair outcome that reflects both parties’ behaviour and financial needs.

It is good to remember that while costs orders in family proceedings are relatively rare; they do happen, most often when one party’s behaviour undermines the cooperative spirit that family courts seek to encourage. If you are going through divorce proceedings, the safest approach is to act reasonably, comply with court directions, and keep negotiations open and constructive. Doing so not only improves your chances of a fair settlement but also protects you from the risk of being hit with an unexpected costs order.