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COUNTING THE COST - WHO PAYS FOR THE LEGAL BILLS WHEN WE SEPARATE?

View profile for Patrick Cook-Fowler
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It is a frequent question at the first meeting: can I ask my ex-partner to contribute to my costs of the ‘divorce’?

In today’s post, I will be addressing the three most common areas of a separation: the divorce or dissolution; resolving the parties’ finances; and the arrangements for the children.

As a general rule (although this is not always the case in certain legal situations), when dealing with the finances and the children, each party will each bear their own costs (this is different to other forms of civil proceedings where the ‘loser’ pays the ‘winner’s costs).

Taking each of the above in turn:

Divorce/dissolution

The ‘petitioner’ in the divorce petition can ask the ‘respondent’ for a contribution to the costs of preparing and filing the petition but they do not necessarily have to agree to this. If the respondent does not then the issue will be decided at a short hearing, normally around pronouncement of Decree Nisi (the halfway stage of the divorce proceedings).

Normally, the issue of the divorce costs can be agreed either before or shortly after the petition has been issued. There is no hard and fast rule as to the size of the contribution – some couples may agree 50% (or less) while there might be sufficient financial inequality for the respondent to pay the whole sum (which has usually been limited in correspondence, to ensure there is no ‘blank cheque’). Splitting the costs in this way should allow the matter to proceed in as amicable a way as possible.

It is important to stress that a costs order at this stage applies to the divorce only. It does not apply to the rest of the matter.

Finances and children

As above, the starting point in finance and children proceedings is that each party pays their own costs.   

There are some circumstances where the Court can order one spouse to pay the other’s costs due to the manner in which they have behaved or conducted themselves through the process.  For example, they may have failed to disclose everything that they should have done, ignored a Court Order or conducted the litigation in such a way that the other party’s costs on a particular point should be repaid.   

Most people pay their costs themselves as individuals, although some divorcing couples choose to split the costs between them.  Depending how closely the parties’ finances are aligned, costs can often be seen as a slice off the top of the matrimonial “pot” of money which is then divided between the parties.  

In children proceedings, costs can really focus the parents on communicating effectively and proactively with one another to avoid back-and-forth between solicitors which is not a cost-effective and pragmatic way of resolving family disputes.

Calderbank offers

These are the hot topic of the day.  A Calderbank offer (named after the case giving rise to these kind of offers) is a type of settlement offer that can be made at any time before judgment.  If the offer is rejected and the offering party can show that given the final result at the end, it was unreasonable for the rejecting party to refuse their offer, the rejecting party may be ordered to pay a proportion, or all, of the offering party’s costs. 

Calderbank offers have generally not been used in family proceedings for some years now (though there their use has not completely disappeared in certain proceedings).  There have been calls to reintroduce them to try and assist in encouraging settlement to avoid large legal bills and there are many scenarios where the costs of proceedings are completely disproportionate to the amount of money at stake.  Others see them as punitive and prefer the simplicity of each party meeting their own costs. There has been much debate about whether Calderbank offers should be re-introduced, and the pressure this might put on separating couples in order to settle the financial aspect of their separation sooner. Others raise the point that if a financial judgment suddenly brought with it a sizeable costs order, all of a sudden there may not be enough left to meet the needs of the paying party. How would that be reconciled? 

The discussions is not going to go away and if there are any further developments, we will address them on this blog.

If you would like to discuss the above in more detail, please do not hesitate to contact one of our team. 

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