element: Costs orders between the parties in a sharing case
35.I deal with this next for convenience although logically and in judicial thinking it’s the 3rd element in the process. When a judge is looking at the outcome, and has an application by one party that the other party should pay costs, how is this dealt with, brought into the outcome. It seems to me there are sometimes mixed messages from case law, and I have endeavoured to find a way through them.36.In this matter, I was quickly satisfied a costs order was appropriate. Failure to negotiate reasonably, failure to accept a good open offer made shortly after the FDR, failure even to engage with that offer, failure to give understandable disclosure, failure to give updating disclosure 6 weeks before the final hearing where a lot arrived a day or so before the final hearing and even then inadequately, and perhaps mostly pursuing a claim which the court found had no or minimal prospect of success. The criteria for a costs order were fully made out. I ordered costs entirely incurred from the date 14 days after the open offer along with another amount for the costs previously incurred in respect of gold and inheritance as itemised by the former wife’s lawyers, coming to a total costs order of £43,000.37.But was I right to do it this way namely a quantification of a figure? Yes and I would hope this wouldn’t be too contentious. It’s a straight costs order, summarily assessed and payable fairly quickly. However, there are many reported decisions, including those I was taken to in closing submissions and referred to below, in which the higher courts treat litigation misconduct and other actions which would give rise to a costs order as part of the discretionary outcome. Without giving specific costs figures, the court nudges the percentage outcome or they push up the lump sum or similar exercises. They do not come to a figure on a costs order but as part of the discretionary process, including s25.2 conduct. Should I have done so here and when should there be any differential? I set out some respectful observations38.It seems to me that where there is a minimal or no discretionary exercise, when the role of the court is to ascertain what should be in the marital sharing pot and the forensic science approach within the sharp dividing line referred to by the Court of Appeal in Hart (2017) EWCA 1306 is in play, then it is not helpful to the parties, and potentially very confusing to understandable justice, then to interfere with the equality division by some sort of discretionary element to reflect litigation misconduct and other circumstances which would ordinarily give rise to a costs order. Instead of dividing equally, to divide perhaps 53% and 47% to take account of litigation misconduct and other such costs-type circumstances. This looks very unfair including for the party who has less than 50% share. So what can be said in this regard?39.Where it is possible, with judicial awareness of what quantum is appropriate as incurred by the claimant party including on a reliable summary assessment, then I think the assessed costs order route is invariably preferential. A straightforward costs order in a particular quantum payable by a certain date40.If however producing a quantified figure for costs is immensely difficult, where perhaps the litigation conduct or the criticised approach of the relevant party weaves in and out throughout the case, where producing summary costs assessment on one or two aspects of the case would be incredibly expensive and lead to incredible extra costs in arguing, where a judge can at best make an intuitive, discretionary and experienced assessment of a range of what might be the likely costs unnecessarily or unreasonably incurred, then there is in our common-law system the real benefit of treatment as part of the discretionary outcome. In other words not a fixed quantum costs sum but a constituent part of either the percentage division or the arithmetic outcome. This is naturally far easier, sits better, in the less forensic, more discretionary approach envisaged in Hart.41.Where the division is a relatively straightforward equal or other agreed percentage of the marital pot, so that it can be established with a fair amount of precision, within the forensic side of the sharp dividing line using the terminology of the Court of Appeal, then I think the court should invariably strive to a quantified costs figure rather than fallback on discretionary outcome, of nudging the percentage or final outcome to take account of what would otherwise be a reflection of the costs unnecessarily incurred.
- Reserved Written Judgment of Deputy District Judge David Hodson
- Introduction
- The summary elements of the case itself
- Costs amounts
- Should I intervene at all?
- [2022] EWCA Civ 772
- [2018] UKSC 12
- First aspect: How to deal with outstanding legal costs in the sharing exercise
- element: Costs orders between the parties in a sharing case
- Third element: Bringing back the “advanced” costs already paid out
- A few examples
- Conclusion
- Postscript
