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Who Pays the Costs in Family Law? Can I Get the Other Party to Pay my Legal Costs?

02/03/2021

The legal costs of the parties in family law proceedings can be very significant and may need to be paid over an extensive period of time.  Costs will be incurred in property matters and in parenting proceedings.  It is not always the case that both parties to the proceedings have an equal ability to pay their legal costs.  In many cases one party may have a superior financial income and can meet their costs while the other has a lower or no income and cannot meet their costs.  This disparity can affect the manner in which proceedings are conducted and result in situations where there is procedural unfairness. 

Can one party be ordered to pay the costs of the other party?

The Family Court/Federal Circuit Court can make Orders for payment of costs as between the parties to Court proceedings. Such Orders can be made:

  1. Pursuant to Section 117 of the Family Law Act 1975 – Costs Order that are made in the conduct of proceedings. 
  2. Pursuant to Section 114 of the Family Law Act 1975 – Costs Order made to provide funding to a party to allow them to conduct the proceedings. 

Section 117 to Order Cost in the Proceedings 

Generally, parties in proceedings under the Family Law Act 1975 will have to pay their own costs with no order that one party is to pay the costs of the other party. However, if the Court is of the opinion that circumstances exist that justify the making an order that one party pay the costs of the other party, then the Court can make an Order in relation to payment of costs.

The Court when considering whether it should make an order for costs it will consider:

  1. the financial circumstances of each of the parties to the proceedings;
  2. 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;
  3. 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;
  4. whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
  5. whether any party to the proceedings has been wholly unsuccessful in the proceedings;
  6. whether either party to the proceedings have made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
  7. such other matters as the Court considers relevant.  

The Family Court/Federal Circuit Court may take account of an offer to settle made by a party in the proceedings.  If a comprehensive offer is made by one party and rejected by the other party, the Court can make an order that the party rejecting the offer pay the costs of the party making the offer.  This may occur if the person rejecting the offer obtains a order which is significantly less favourable than the offer that was rejected. 

Section 114 and Section 80 Family Law Act 1975 

In circumstances where one party may be at a financial disadvantage in terms of having the financial capacity to pay their costs and the other party has superior income or control of assets, the Court can make an Interim Costs Order.  The Court can make an Order requiring payment of money by one party to provide funds for another party to pursue his or her claims for property settlement.  The practical basis for making the Order is that if one party does not have the control of assets or income to fund the case, the Court may make an order that the party that has control of the assets or appropriate income, make payment to the other party to enable that party to fund his or her case.

Before the Family Court/Federal Circuit Court will make such an Order, there must be established that one party has the capacity to meet his or her own legal costs and disbursements and that the other party does not have sufficient assets, resources or income from which to meet the costs of the proceedings. 

To be successful in such an application it is also necessary on the application to provide evidence as to the amount of costs incurred and the anticipated costs and disbursements (with the basis) of the person seeking such a costs order. 

The payment or transfer of property will be taken into account when the Court finally determines the property application. 

When making an offer it should be set out with the basis and reasons as to why the offer is likely to be beneficial for the person who receives the offer to accept the offer.

The earlier an offer is made the better; as firstly, the case may resolve or secondly, if the person who made the offer (which was not accepted by the other party) receives a significantly better outcome after a contested hearing, that person is likely to obtain an order in his or her favour that the other party pay the costs of the party who made the offer and such order is usually made to take effect from the date of the offer. 

Accordingly, the earlier the offer is made, the better it is for the person whom makes the offer.  Ask us about making an early offer and what is the appropriate offer to make.

Navigating financial/property settlements and/or contact issues for children can be stressful and difficult at times.  If you are proposing to seek financial/property settlement from your spouse or partner or require assistance in relation to contact issues for your child/children, our experienced Senior Family Lawyers can assist you.  Please contact Richard Watson Senior Family Lawyer or his Personal Assistant Shereen Da Gloria to discuss your matter and seek timely advice.

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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