Divorce can be an emotionally and financially taxing process, particularly when it comes to settling financial arrangements. The courts in England and Wales aim to encourage parties to reach a fair outcome independently where possible. However, when financial matters are contentious, one or both parties might find themselves having to go through formal court proceedings. In such situations, legal costs can become a significant concern. Understanding how and when it’s possible to recover these costs can help manage expectations and inform strategic decisions throughout the divorce process.
What Are Legal Costs in the Context of Divorce?
Legal costs typically refer to the fees you pay your solicitor and any barristers involved in your case, as well as additional costs like filing fees, expert reports, and court-related expenses. In the case of divorce, there are two distinct elements where costs come into play: the divorce proceedings themselves and the financial remedy proceedings. While the divorce itself has become more streamlined, particularly following the introduction of the no-fault divorce in 2022, resolving financial claims can be more complex and contentious.
In general, each party is expected to bear their own legal costs in financial remedy proceedings unless there is a compelling reason for the court to order otherwise. This norm is rooted in the ‘no order as to costs’ principle, which the Family Procedure Rules 2010 established as the default position. But, while rare, there are circumstances under which the court may order one party to contribute to or cover the other’s legal expenses.
General Principles Governing Costs in Financial Remedy Hearings
When financial remedy proceedings are necessary, the overriding objective of the Family Court remains to deal with the case justly. This includes making sure the parties are on equal footing, encouraging them to settle matters amicably, and managing the case in a way that is proportionate to its complexity and financial value.
As a starting point, the Family Procedure Rules discourage costs orders between the parties, unlike civil litigation where the losing party often pays the winner’s costs. Nevertheless, the court retains discretion to depart from this approach in appropriate circumstances. The emphasis is largely on fairness and conduct—both in terms of how the litigation is handled and the broader context of the relationship.
It is important to understand that the court’s power to award costs is not purely punitive. It is a tool designed to promote proper conduct during proceedings and to ensure that one party is not unfairly disadvantaged by the other’s unreasonable behaviour.
When Might One Party Be Required to Pay the Other’s Legal Costs?
The situations in which a party might be able to claim legal costs from their former spouse in financial remedy proceedings are relatively limited. The court will consider a range of factors when determining whether to make a costs order. These include:
1. Conduct before and during the proceedings
2. Compliance with court rules and directions
3. Reasonableness of the parties’ litigation positions
4. Efforts made toward settlement
5. The overall financial circumstances of each party
Conduct is a key consideration. If, for example, one party fails to disclose their financial assets, is persistently late in providing documentation, or engages in frivolous litigation, the court may penalise them with a costs order. Similarly, if a party refuses to consider reasonable settlement offers and forces the matter unnecessarily to a final hearing, they could be vulnerable to a costs order if the outcome is less favourable than what was offered.
Another common context in which a costs order might be made is where one party has made a significantly better financial offer early in the proceedings that the other party unreasonably rejects. If the rejecting party ultimately receives a less advantageous order from the court, their refusal to settle may be deemed unjustified.
Additionally, the court may take into account whether a party’s conduct has caused disproportionate legal costs. For example, if someone behaves in such a way that necessitates additional hearings or the use of expert third parties (such as forensic accountants), those extra costs could serve as a basis for a partial or full costs claim.
Procedure for Claiming Legal Costs
The process for seeking legal costs during financial remedy proceedings involves specific procedural steps. Costs are not automatically assessed or awarded at the conclusion of the case, and it is the responsibility of the party seeking costs to request them.
Usually, this is done by making a formal application to the court—either at the final hearing or, occasionally, beforehand in situations where costs are being incurred due to particular conduct. The application must be supported by a schedule of costs, detailing the work undertaken, the rates charged, and the total amounts claimed. The court may then hear submissions from both sides on the matter.
It’s important to appreciate that the court is not bound by standard costs principles as seen in civil law. Family courts have a wide discretion to determine what outcome is fair in the context of the family’s finances. Even where poor conduct is demonstrated, the court may choose not to award costs if doing so would be unduly harsh or detrimental to the wider financial settlement.
Litigants in Person and Legal Costs
With an increasing number of individuals representing themselves in family proceedings, the issue of claiming legal costs becomes more complex. Generally speaking, litigants in person are unable to claim legal fees in the same way that solicitors and barristers can. However, they may be able to claim for reasonable disbursements, such as expert fees or court filing fees, and in some circumstances modest hourly rates for their preparation time (subject to judicial discretion).
That said, even when both parties are self-represented, the question of wasted or unnecessary costs may still arise. Judges maintain the inherent power to sanction dilatory or obstructive behaviour, whether it originates from a solicitor-led party or a lay person.
The Role of Offers to Settle and Calderbank Letters
Prior to the mid-2000s, ‘without prejudice save as to costs’ offers—also known as Calderbank letters, named after the leading case in Calderbank v Calderbank—played a valuable role in influencing costs outcomes. These were private settlement offers kept off the court record unless the matter proceeded to a determination where costs were disputed.
While their formal usage has diminished in family law since the introduction of new procedural rules, they have not disappeared entirely. If an offer is rejected unreasonably and the final outcome is worse for the party who declined it, the existence of that offer can still be used to argue for costs. Therefore, making sensible, documented offers during the proceedings remains an important tactical step.
Parties are encouraged to engage openly in dispute resolution processes including mediation, solicitor-led negotiations, and round-table discussions. Not only can this drastically reduce costs, but it may also influence any future decision regarding costs awards, particularly where one party is seen to have made genuine efforts to avoid litigation.
Legal Aid and Cost Recovery
A relevant consideration for lower-income individuals is whether legal aid is available and if so, how this impacts costs recovery. While civil legal aid is mostly unavailable for divorce these days, some limited exceptions exist—mainly in cases involving domestic abuse or child abduction. If one party is legally aided and the other is privately funded, it can create financial disparity in the proceedings.
Courts are generally cautious in ordering cost payments against legally aided parties, particularly if doing so would defeat the purpose of granting aid or leave that individual without essential resources. Where cost awards are made against legally aided parties, enforcement can be more complicated.
Third-Party Litigation Funding
In certain high-value or complex cases, one party may obtain loans from professional litigation funders to finance their legal costs. These loans are usually secured against the outcome of the financial settlement, often taking the form of a charge on anticipated lump sums or property settlements.
If one party has had to resort to this form of funding due to the other spouse withholding financial support during the proceedings, the courts may factor this into a costs order or the overall financial award. However, it’s worth noting that the court is not obliged to reimburse the cost of commercial borrowing unless it considers the borrowing either unavoidable or reasonable under the circumstances.
Costs in Appeals and Enforcement Proceedings
Should a party choose to appeal a financial remedy order, the presumption of no order as to costs does not automatically continue. In appeal cases, the civil standard applies more frequently, and the losing party may be required to pay the successful party’s costs.
Likewise, in enforcement proceedings—where one party has failed to comply with a financial order—courts have a wider discretion to award costs against the non-compliant party, especially where their failure to pay necessitated legal steps to secure compliance.
Managing and Minimising Legal Costs
Regardless of whether you hope to claim legal costs, preventing unnecessary expense is almost always preferable. Early advice from a family law solicitor can help outline the likely financial outcome, bringing clarity and realism to your position from the outset.
Preparing comprehensive financial disclosure documents, taking a reasonable approach to settlement, and presenting consistent positions throughout the proceedings can all minimise the risk that the judge will view your conduct as uncooperative or combative.
Moreover, making timely and fair offers to settle can demonstrate your willingness to resolve matters amicably and may create a favourable impression if a cost application is ultimately required.
Conclusion
Legal costs in financial remedy proceedings can quickly become a significant financial burden for divorcing parties. The courts generally expect each person to bear their own expenses but retain the discretion to make costs orders in specific situations—particularly where one party’s conduct or litigation stance is notably unreasonable.
Understanding when and how you might be able to recover some or all of your legal costs requires close attention to the rules, careful management of the litigation process, and strategic decision-making. Keeping good records, behaving reasonably, and staying open to compromise can not only reduce your legal expenses but also improve your position should a costs argument arise.
While costs recovery is far from guaranteed, an awareness of your rights and responsibilities during financial remedy proceedings can ensure that any claims are well-founded and presented effectively. Ultimately, the goal should remain securing a fair and workable financial settlement while avoiding unnecessary conflicts that escalate legal expenses.