The general rule in financial/property proceedings (ancillary relief) is that the court will not make an order requiring one party to pay the costs of the other party, but the court may make such an order at any stage in the proceedings if it considers it appropriate to do so because of the conduct of a party in relation to the proceedings, whether before (for example, failure to comply with the pre-application protocol – see Chapter 4) or during them. In deciding whether to make such an order, the court must have regard to the following:
a) Any failure by a party to comply with the rules, or with any order of the court, for example failure to do something within a time limit set by the court.
b) Any open offer (i.e. proposal) to settle by a party – an open offer is an offer not made without prejudice (i.e. the letter setting out the terms of the offer has the words ‘without prejudice’ at the top of it). The purpose of a without prejudice offer is to ensure that the offer cannot be shown to the court if it is not accepted, so that the recipient cannot use it to argue that the maker of the offer should pay at least that sum. It
is usually used to make generous offers and, until the rules changed in 2006, was often used save as to costs (called a ‘Calderbank’ offer), so that if the offer was not accepted and it was not beaten in court, the maker of the offer could then show the letter to the court and ask the court to order the other party to pay their costs from the date of the offer, on the basis that those costs would have been saved if the offer had been accepted. However, for all proceedings started on or after 3 April 2006, the court no longer takes into account any offers headed ‘without prejudice’ or ‘without prejudice save as to costs’ when considering whether to make a costs order. Accordingly, if you want to ensure that the other party could be penalised in costs if they refuse your offer and then fail to beat it in court, then that offer must be made in an open letter. Open offers must obviously be carefully considered in the light of the possible costs consequences of failing to beat the offer in court – if a party is represented then their costs of a final hearing alone are likely to be at least £3,000, and very probably considerably more than that.
c) Whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue – so make sure that any matter that you raise in the course of the proceedings is actually relevant to the outcome of the proceedings. For example, there is no point in a husband trying to prove that his wife has a boyfriend if there is no evidence that they have any intention of cohabiting. Similarly, there is no point in contesting an allegation made by the other party if they clearly have evidence that proves the allegation.
d) The manner in which a party has pursued or responded to the application or a particular allegation or issue, such as
continual unwarranted requests for further information and/ or documentation – the ‘fishing expedition’ – in the hope of finding something to support your case or, worse still, taking or copying documents belonging to the other party without their permission.
e) Any other aspect of a party’s conduct in relation to the proceedings which the court considers relevant – an example here might be threats made to the other party if they pursue their claim.
Lastly, the financial effect on the parties of any costs order.
no regard for the welfare of the children. Accordingly, if you are involved in children proceedings you should expect to have to pay your own costs even if you succeed in getting the order you seek. By the same token, if you do not succeed you should not be ordered to pay or contribute towards the other party’s costs, unless you were clearly unreasonable in the way you conducted the proceedings.