Family Court of Australia – Does the Loser Pay Costs in Family Law Matters

05/03/2019

Parties to the proceedings in the Family Court of Australia are usually represented by Solicitors.  Solicitors charge their client’s fees (costs).  Both parties to proceedings will pay their Solicitor’s costs and will also be required to pay the fees for the filing of the Application and in respect of Court events e.g. Hearing fees and Conciliation Conference fees. 

In matters in most other Courts the general rule is the costs follow the event.  In other words the person who wins the case will usually be entitled to claim their costs of the proceedings.  The losing party will be ordered to pay the costs of the winning party.

Costs can be ordered on an indemnity basis – This basis will result in receiving costs that is closer to (but not necessarily equal to) the amount paid out in costs. 

Usually costs can be ordered on an ordinary basis.  This generally means that the costs that are received are generally about two thirds of the costs that are paid; not the whole of the costs paid. 

Family Law Act – When will the Court make an Order that one Party Pay the Costs of Another Party 

The position in the Family Court is different.  Section 117 of the Family Law Act (Cth) 1975 provides that subject to certain matters each party to proceedings under the Family Law Act should bear his or her own costs i.e. the usual outcome is that there will be no Order that one party to the proceedings pay the costs of the other party to the proceedings. The Family Law Act sets out the circumstances where the Court could be persuaded to make a costs order in favour of one party against another party.  These circumstances are set out in Section 117(2A). 

The circumstances are:

(2A) In considering what costs order (if any) should be made the court shall have regard to:

(a) the financial circumstances of each of the parties to the proceedings;

(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;

(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;

(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;

(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;

(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and

(g) such other matters as the court considers relevant.

The exceptions referred to above provide for Orders for payment of costs by one party to another party to the proceedings.  The Court needs to be persuaded that it should make a costs order and the opportunity to receive the benefit of a costs order should be considered from the commencement of the proceedings and throughout the proceedings. 

In particular, care should be taken to ensure that the parties’ conduct in the proceedings is not behaviour that adds to the cost of the proceedings i.e. bad behaviour within the proceedings may lead to the Court forming the view that one party has been put to extra costs by reason of the others failure to comply with procedures and orders made. 

The Court will be more likely to grant an order in favour of one party where that party has been wholly successful in proceedings i.e. if there is a clear winner the Court may be more likely to grant an order for costs. 

Significant to this is the issue of whether any party has made an offer in writing to settle the proceedings prior to hearing.  In circumstances where one party has made an offer to settle (and that offer is not accepted) and the matter proceeds to final hearing and the party who has rejected the offer does not do better (or significantly better) than the offer, then the Court may make an order for payment of costs from the date when the offer was made. 

The manner in which the proceedings are conducted by the Solicitors can have significant benefits if offers to settle are made at an early stage of the proceedings.  It is important to consider an appropriate offer at an early stage if at all possible.

At Watson & Watson our experienced Family Law Solicitors can assist you in your family law proceedings and provide timely advice to assist you in achieving the best possible outcome that is both cost effective and positive.  Do not delay, please contact Richard Watson Senior Family Solicitor or Shereen Da Gloria his Personal Assistant to discuss your matter.

This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 9221 6011

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