What is a Costs Order in financial remedy?

In the context of financial proceedings in England a costs order is a directive issued by the court regarding the payment of legal costs incurred by the parties involved. Understanding the implications and nuances of a costs order is crucial for anyone navigating financial remedy proceedings following a divorce or dissolution of a civil partnership.

A costs order determines who will be responsible for paying the legal costs associated with financial remedy proceedings. These costs can include solicitor fees, barrister fees, court fees, and other related expenses. The court has the discretion to decide whether one party should pay the other party’s costs, or whether each party should bear their own costs.

Types of Costs Orders

There are several types of costs orders that the court can make:

1. No Order as to Costs: Each party bears their own legal costs. This is the most common type of costs order in financial remedy proceedings.
2. Costs in the Application: The costs are reserved to be decided at a later stage in the proceedings.
3. Costs in Any Event: One party is ordered to pay the other party’s costs regardless of the outcome of the case.
4. Costs Thrown Away: Costs incurred due to a specific action or inaction by one party, such as failing to comply with court directions, are to be paid by that party.
5. Costs on an Indemnity Basis: The paying party must cover all reasonable costs incurred by the receiving party, with any doubt resolved in favour of the receiving party.

Factors Influencing Costs Orders

When deciding on a costs order, the court considers several factors, including:

• Conduct of the Parties: The behaviour of each party during the proceedings can significantly influence the court’s decision. Unreasonable conduct, such as failing to disclose financial information or unnecessarily prolonging the proceedings, can result in an adverse costs order.
• Offers and Negotiations: The court may take into account any offers made by the parties to settle the matter. If one party made a reasonable offer that was rejected by the other party, the court might order the rejecting party to pay the costs.
• Financial Circumstances: The financial position of each party is also considered. The court aims to ensure that any costs order is fair and does not unduly burden one party.

It is important to note that it is not the role of the family court to punish parties for their behaviour in the marriage and so you would be unlikely to achieve a costs order for example for adultery.

Costs Orders in Practice

In practice, costs orders in financial remedy proceedings are relatively rare. The general principle is that each party should bear their own costs, promoting a fair and equitable resolution without the added pressure of potential costs liabilities. However, in cases where one party’s conduct has been particularly unreasonable, the court may be more inclined to make a costs order, but generally only where that has caused financial hardship.

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