Ancillary relief costs amendment

The implementation date for the long-awaited costs rules change has been announced. Paragraph 1(1) of the Family Proceedings (Amendment) Rules 2006 will come into force on 3 April 2006 (SI 2006 No352(L)1). These rules amend the Family Proceedings Rules 1991 in relation to costs of ancillary relief proceedings. They do not apply to applications under schedule 1 of the Children Act 1989, Trust of Land and Appointment of Trustees Act 1996, Married Women's Property Act 1876, or other family proceedings in this general class. The President of the Family Division issued a practice direction dated 20 February 2006 explaining the operation of the new scheme.


In summary, the main provisions are: Rule 2.71(4) &150; the general rule in ancillary relief proceedings is that the court will not make an order requiring one party to pay the costs of another party; the court may make a costs order at any stage of the proceedings where, due to the conduct of a party in relation to the proceedings, it considers it appropriate to do so.


Rule 2.71(5) &150; in determining whether or not it is appropriate to make a costs order the court will have regard to:


  • A failure by a party to comply with the rules, any order of the court, or any practice direction which the court considers relevant;


  • Any open offer to settle made by a party;


  • Whether it was reasonable for a party to raise, pursue or contest particular allegation or issues;


  • The manner in which a party has pursue or responded to the application or a particular allegation or issue;


  • Any other aspect of a party's conduct in relation to the proceedings which the court considers relevant;


  • The financial effect on the parties of any costs order.



    • The Calderbank letter &150; which for more than 30 years has been within the armoury of a family law practitioner - will vanish. In fact, no offer to settle which is not an open offer shall be admissible at any stage of the proceedings. This rule is only relaxed in relation to rule 2.61E, which relates to the financial dispute resolution appointment.


    Rule 5 substitutes a new rule 2.61F of the rules and requires completion of a new-style form H, which is rather more detailed than the previous form H, to be lodged at any interim hearing. A very detailed costs assessment form H1 (rule 2.61F) will now be required to be filed not less than 14 days before the date fixed for the final hearing of an application for ancillary relief.


    The Family Proceedings Rules 1991 shall apply to any application for ancillary relief made in a petition, answer or form A before the new rules come into force. They also apply to any application under section 10(2) of the Matrimonial Causes Act 1973 or an application under section 48(2) of the Civil Partnership Act 2004 made before 3 April 2006 as if the new rules had not been made.


    These fundamental rule changes will bring about a tactical shift in the conduct of ancillary relief litigation. At the substantive hearing, the court will be called on to consider a party's individual liability as to costs and that liability will form part of the substantive application. It is difficult to envisage how the change in the rules will produce anything other than satellite conduct litigation in an attempt to recover costs from an opponent. While the lottery of the old Calderbank procedure may be lost, the gauntlet of litigation conduct will surely now be thrown down.




    Conduct


    In H v H (financial relief: attempted murder as conduct) [2006] 1FLR (forthcoming), Mr Justice Coleridge had to consider, on 13 July 2005, whether or not the husband's conduct was such that it would be inequitable to disregard it within section 25(g) of the Matrimonial Causes Act 1973.


    In this case the husband had made a vicious attack on his wife in the family home and in the presence of the couple's young children. The wife, who was a former police officer, sustained serious knife injuries and has been unable to work since the incident. In spite of the husband's not-guilty plea, he was sentenced to 12 years' imprisonment for attempting to murder his wife. The issue for the matrimonial court to consider was whether or not his persistent refusal to consent to the sale of the former matrimonial home, or to allow it to be let out, constituted section 25(g) conduct.


    Mr Justice Coleridge stated that the court should not be punitive or confiscatory for its own sake; the husband, through his own fault, had placed the wife's needs in a much higher category to his own. As a consequence, it was determined that the conduct alleged was at the very top end of the scale and should be taken into account by the court in determining the proper award to the wife.


    By Gill Rivers, consultant, Charles Russell, London