Family Law: Be careful about costs sanctions if you fail to negotiate

October 6, 2020

In financial remedy proceedings, the starting point in respect of costs is that each party bears their own legal costs and is not required to contribute to the other party’s costs. However, this may not be the case if one party does not co-operate with negotiations in an effort to agree a financial settlement.

In the recent case of JB v DB [2020] EWHC 2301 (Fam), the parties held two property trusts governed by New York law, of which their four children were beneficiaries. The parties agreed that the trusts were to be dissolved as part of the agreement about the division of their assets on divorce and this was included in the consent order which was approved by the court in 2018. Unfortunately, there were some difficulties with dissolving the trusts as the children’s trust interests had to be considered. This meant that they were joined as parties to the court proceedings and a children’s guardian was appointed for the two younger children.

As part of the directions made by the court at a hearing in April 2020, it had ordered that the parties should try to resolve the issues before the next hearing in July. A conference between counsel was arranged in May but was cancelled at late notice by the husband’s solicitors due to funding reasons. The husband’s new solicitor advised the wife’s solicitors in June that she did not consider a meeting would achieve anything. As a result, the wife requested that the husband should pay her costs since April in the sum of £52,039. The court did not agree, on the basis that the wife would have incurred costs anyway even if a meeting between the parties’ counsel had taken place. The court made a costs order against the husband in the sum of £15,000 for “wilfully” refusing to negotiate.

This case is a significant reminder that you should negotiate with the other party and attempt to reach an agreement about the division of your assets in an effort to avoid the need for, or the continuation of, financial remedy proceedings. Therefore, it is important to consider settlement proposals and try to reach an agreement as soon as you have the relevant information about the other party’s assets; especially if this has been ordered by the court.

Wallace Robinson & Morgan is happy to help if you would like advice about agreeing a financial settlement or beginning financial remedy proceedings. If you would like to discuss your matter, please call and ask to speak to a member of the Family law team on 0121 705 7571.

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