Family law proceedings often come with financial and emotional burdens for the parties involved. A significant aspect of these cases is determining who bears the legal costs.
While the general rule is that each party pays their own legal expenses, there are circumstances where the Court may order one party to cover the other’s costs. Understanding these rules and exceptions is essential for navigating family law disputes effectively.
Usually, parties who are involved in family law proceedings pay their own legal costs. However, there are exceptions to this. The Court may order one party to pay the legal costs of another.
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Factors Considered by the Court When Ordering Costs
The Family Law Act sets out the factors the court should consider making an Order for costs, which include:
- The financial circumstances of the parties;
- Whether any party received Legal Aid;
- The conduct of the parties in the proceeding;
- Whether parties have followed previous orders;
- Whether any party has been wholly unsuccessful in the proceedings;
- Whether either party made an offer to settle, and the terms of the offer;
- Any other matter the court considers relevant.
Costs ordered in accordance with the scale of costs set out in the schedules to the Family Law Act are called party-party costs. The amounts payable are set out in the schedules to the Act.
The Court may order that a party pay all of the other party’s costs reasonably and properly incurred and not based on the scale of costs. These costs are called indemnity costs.
An order for indemnity costs is a significant departure from the normal standard and requires something exceptional. An order for indemnity costs represents a very great departure from the normal standard.
Circumstances That Justify Indemnity Costs
Some examples of circumstances that might justify the awarding of indemnity costs are:
- Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that they had no chance of success. In such cases, the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts.
- Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud.
- Evidence of particular misconduct causing loss of time to the court and to other parties.
- The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions.
- An imprudent refusal of an offer to compromise.
In conclusion, legal costs in family law matters can significantly impact the parties involved. While the general rule is that each party covers their own expenses, exceptions such as party-party costs and indemnity costs can shift the financial burden. Understanding the factors and circumstances that influence these decisions helps parties better prepare for potential outcomes in their case.
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