Nicholas Allen QC & Joseph Switalski explain cost changes

26 May 2020

COSTS IN FINANCIAL REMEDY PROCEEDINGS – JULY 2020 CHANGES

 1)     Costs have been attracting increased focus in some recent decisions (see Francis J in WG v HG [2018] EWFC 84 and Cohen J in MB v EB (No. 2) [2020] 1 FLR 1086). Practitioners will also have noted the changes made to paragraph 4.4 of FPR Practice Direction 28A whereby it was made clear that to refuse openly to negotiate reasonably and responsibly may well amount to conduct in respect of which the court will consider making an order for costs. 

2)     Further changes have followed. The Family Procedure (Amendment) Rules 2020 (SI 2020/135) came into force partly on 6th April 2020 and will come into force fully on 6th July 2020 (when rules 10 – 14 inclusive – which are the new costs rules - come into force).  

3)     So far as costs are concerned these new rules provide:

a)     a substitute rule 9.27 (“Estimates of costs”) which provides that:

i)      not less than one day before every hearing (save for the final hearing) or appointment, each party must file with the court and serve on each other party an estimate of the costs incurred by that party up to the date of that hearing or appointment. Sections A and B of the amended Form H (available here) must be completed;

ii)     not less than one day before the First Appointment, each party must file with the court and serve on each other party an estimate of the costs that party expects to incur up to the FDR Appointment if a settlement is not reached. Sections A, B and C of the amended Form H must be completed;

iii)    not less than one day before the FDR Appointment, each party must file with the court and serve on each other party an estimate of the costs that party expects to incur up to the final hearing if a settlement is not reached. Sections A, B, C and D of the amended Form H must be completed;

iv)    not less than 14 days before the date fixed for the final hearing each party must (unless the court directs otherwise) file with the court and serve on each other party a statement giving full particulars of all costs in respect of the proceedings which that party has incurred or expects to incur, to enable the court to take account of the parties’ liabilities for costs when deciding what order (if any) to make for a financial remedy. The Form H1 has been amended for this purpose (available here);

v)     the amounts set out in the costs estimate or particulars of costs must be recorded in a recital to the order made at the hearing or appointment before which the estimate or particulars were filed or served; and

vi)    if a party fails to comply with these obligations: (a) this fact must be recorded in a recital to the order made at the hearing or appointment; and (b) the court must direct that the relevant costs estimate or particulars of costs must be filed with the court and served on each other party within three days of the hearing or appointment or within such other time period as the court directs; and 

b)     a new rule 9.27A (“Duty to make open proposals after a FDR appointment or where there has been no FDR appointment”) which provides that:

i)      where at a FDR Appointment the court does not make an appropriate consent order or direct a further FDR appointment, each party must file with the court and serve on each other party an open proposal for settlement (a) by such date as the court directs; or (b) where no direction is given, within 21 days after the date of the FDR appointment; and

ii)     where no FDR Appointment takes place, each party must file with the court and serve on each other party an open proposal for settlement (a) by such date as the court directs; or (b) where no direction is given, not less than 42 days before the date fixed for the final hearing.

4)     The duty to serve open proposals (14 days before the date of the final hearing for the applicant and 7 days after service of the applicant’s proposals for the respondent) remains (with only the heading of the rule changed by the addition of the words “before a final hearing”added after “Duty to make open proposals”).

5)     It will be seen that the Forms H and H1 are now also amended so that (i) they include a Statement of Truth that must be signed and dated; and (ii) parties’ legal representatives are also required to confirm that they have discussed the estimate of costs with their client.

Back to News Listing