Separating from a partner is never easy, and when children and assets are involved, the process can become even more complex and emotionally taxing. For those who are separating under the Family Law Act 1975 in Australia, it’s essential to understand the legal principles surrounding costs and how they may impact your case. This article delves into the legal principles of cost orders and when costs can be awarded against another party.

Can Costs Be Awarded Against Another Party?

One of the most common questions we receive regarding family law matters is whether costs can be awarded against another party. While it’s natural to hope that the other side will be ordered to pay your legal fees, it is essential to manage your expectations. In reality, costs orders are rare, and the expenses incurred in pursuing them often outweigh the potential recovery.

To better understand the issue of costs in Family Law matters, let’s examine the legal principles at play. In the Federal Circuit and Family Court of Australia, proceedings under the Family Law Act 1975 (Cth) operate differently from other Australian courts. As stated in Section 117(1) of the Act, the starting point is that “each party to proceedings under this Act shall bear his or her costs.” In other words, costs do not automatically follow the event, meaning that regardless of the outcome or who is successful, each party is generally responsible for their own legal expenses.

However, there are exceptions to this rule. Section 117(2) of the Act states that “if, in proceedings under this Act, the court is of the opinion that there are circumstances that justify it in doing so, the court may… make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.” This means that if the court deems it justified, it has the power to make cost orders that it considers fair and appropriate.

Factors that the Court Considers When Justifying Cost Orders

When determining whether cost orders are justified, the court will consider several factors:

  1. The respective financial circumstances of each party
  2. Whether a party is receiving legal aid and the terms of that aid
  3. The conduct of the parties throughout the proceedings, including their behaviour in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents, and similar matters
  4. Compliance with court orders
  5. Whether a party was wholly unsuccessful in the proceedings
  6. Any settlement offers made and the terms of those offers
  7. Any other matters the court considers relevant

It’s crucial to note that the court will not automatically award costs simply because one party has been successful in the proceedings. The court must be satisfied that there are specific circumstances that justify making a cost order.

One such circumstance is when a party has acted unreasonably or has unnecessarily prolonged the proceedings. This could include failing to comply with court orders, making frivolous applications, or refusing to engage in genuine settlement negotiations. In such cases, the court may consider it appropriate to order that party to pay some or all of the other party’s costs.

Another situation where costs may be awarded is when one party has made a genuine offer of settlement that the other party rejects, and the final outcome is less favourable to the rejecting party than the offer. This is known as a Calderbank offer, named after the English case Calderbank v Calderbank [1975] 3 All ER 333. Suppose a Calderbank offer is made and rejected, and the rejecting party ultimately receives a less favourable outcome. In that case, the court may order that party to pay the other party’s costs from the date the offer was made.

It’s important to remember that even if the court does make a cost order, it will not necessarily cover all of your legal expenses. The court may order that only a portion of your costs be paid, or it may limit the costs to a specific stage of the proceedings. Additionally, enforcing a cost order can be a lengthy and expensive process in itself, which is why it’s often not pursued.

How an Experienced Family Lawyer Can Assist with Cost Orders

When separating under the Family Law Act 1975, it’s essential to work with an experienced family lawyer who can provide you with realistic advice about the likelihood of obtaining a cost order in your specific circumstances. Your lawyer can also help you explore alternative dispute resolution options, such as mediation or collaborative law, which can be less adversarial and more cost-effective than going to court.

In conclusion, while it’s understandable to hope that the other party will be ordered to pay your legal costs in Family Law matters, it’s important to have realistic expectations. Costs orders are rare and are only made when the court considers it justified based on the specific circumstances of the case. Even when costs are awarded, recovering them can be a challenging and expensive process.

The best approach is to focus on resolving your matter as efficiently and amicably as possible, with the guidance of a skilled family lawyer. By prioritising the well-being of yourself and your children, and by being open to alternative dispute resolution methods, you can minimise the financial and emotional toll of separation and work towards a brighter future.

Ramsden Family Law – We Are Here to Help You

Navigating the complexities of Family Law matters, particularly concerning the issue of costs, requires strategic guidance and expert support. At Ramsden Family Law, we understand the intricacies of cost orders and the nuances of Family Law proceedings. Our experienced team can provide you with realistic advice tailored to your specific circumstances, helping you manage expectations and make informed decisions. We offer comprehensive legal advice, from exploring alternative dispute resolutions to representing you in court. Contact our team today to book a confidential initial consultation with one of our experienced family lawyers.