General principles — overview

In family proceedings in the High Court and county court costs are subject to the Civil Procedure Rules 1998 (CPR 1998), in particular Pts 43, 44, 47 and 48, subject to some modifications and the Costs Practice Direction. There are additional costs rules in the Family Procedure Rules 2010 (FPR 2010) Pt 28, and in PD 28A applicable in financial remedy proceedings.

Private costs

The general rule that costs follow the event is specifically disapplied in family proceedings. There were significant changes to costs in ancillary relief proceedings by virtue of the Family Proceedings (Amendment) Rules 2006, which apply to all ancillary relief applications filed after 3 April 2006.

The court has a wide discretion about the nature and extent of any costs order that it may make. It will have regard to all the circumstances, including:

• the parties' conduct

• whether a party has succeeded on part or all of their case

• any admissible offer to settle

Although CPR 1998 set out what matters the court should take into account, case law and accepted court practice should not be overlooked as these can provide additional guidance as to when costs orders may be made.

CPR 1998 provided a new procedural code with an overriding objective of enabling the court to deal with cases justly. The objective is relevant to considering both the principle of whether an order for costs should be made and, if so, the amount of costs to be paid.

A costs order may be made for a proportion of the costs or a stated amount, or in relation to a distinct part of the proceedings.

The effects of certain commonly made orders are set out in the practice direction. The effect of an order for costs reserved is that the decision about the specified costs is deferred and if no later order is made in relation to the costs, they will be costs in the case.

An order for costs must be complied with within 14 days of the date of the judgment or order or the date of the certificate that states the amount to be paid.

A costs order may be made in favour of, or against, a person who is not a party to the proceedings.

Public funding

Where an order for costs is made against a publicly funded person, they have a degree of protection by virtue of the Access to Justice Act 1999. The amount of costs awarded against a publicly funded person must not exceed what it is reasonable for them to pay having regard to all the circumstances, including:

• the financial resources of all the parties to the proceedings

• their conduct in connection with the dispute to which the proceedings relate

Certain assets of the funded person will be disregarded, eg the first £100,000 of the value of the funded person's only or main home. Costs protection will end when a certificate of public funding is discharged or revoked.

At the outset of the case a client's eligibility for public funding must be considered. Failure to advise on eligibility may amount to negligence even on the part of firms that do not undertake public funding.

Wasted costs

The court has the power to disallow costs or order a party's legal or other representative to meet the whole or part of any wasted costs.

Wasted costs are costs incurred by a party because of an improper, unreasonable or negligent act or omission by any legal or other representative or any employee of such representative, or when, in the light of such act or omission occurring after they were incurred, the court considers it is unreasonable to expect that party to pay specified costs.

If the court is considering such an order, it must give the legal representative a reasonable opportunity to attend a hearing to give reasons why it should not do so. Such an order may be made of the court's own initiative or as a consequence of an application by a party.