The question as to who pays the costs in Family Law proceedings can be a complex one. And therefore must be assessed on a case-by-case basis.  Costs applications in family law matters are rare as the Court aims to bring parties together and resolve disputes amicably. The aim of typical family law matters is for each party to pay its own costs.. This includes solicitor's fees and sharing the cost of any required experts.

Who pays the costs in family law? The exception to the rule

However, in exceptional cases the Court can use its discretion to order one party to pay the actual costs of the other party.  Certain matters require the court to depart from its usual practice and order indemnity costs. Parties should be wary however, when making an application for indemnity costs. Without sufficient grounds the Court may consider this to be an abuse of process and award costs against you.

Circumstances for Indemnity Costs

The concept of indemnity costs stemmed from the matter of Colgate Palmolive Co v Cussons Pty Ltd [1993] FCA 801 in which Justice Shepherd described the circumstances in which an application of indemnity costs may apply.  Firstly, a party can face costs when they make false allegations of fraud, knowing them to be false or irrelevant. Secondly, where there is evidence of particular misconduct which causes a loss of time for the court and the parties. Thirdly, the Court considers situations where a party commenced or continued proceedings for an ulterior motive or wilfully disregarded the known facts. Fourthly, the Court considers cases where groundless contentions prolonged litigation or where allegations were made that never should have been made. Fifthly, where there was an imprudent refusal of an offer to compromise. Finally, where a party is in contempt of court.

Other factors the court may consider

When making a ruling for costs the Court will consider the parties financial circumstances, whether they were in breach of existing court orders or whether any attempts have been made to settle the matter.  You cannot apply for costs simply because you feel that the other party has wronged you. Or you have received what you believe to be an unjust outcome. At New South Lawyers, we understand that family law matters can be stressful and complex you can feel unjustly impacted by your matter, but it is important to try and remain calm and level-headed. You should carefully consider making an application for costs, as successful applications are rare and the consequences can be costly.  We highly recommend seeking legal advice from our Family Lawyers if you are require more information about indemnity costs to solve your dispute. To discuss your Family Law matter and find the best option for you, please contact our Sydney Family Law team on 02 9891 6388     

New South Lawyers’ communications are intended to provide commentary and general information. To that end, people should not rely on this communication as legal advice. Accordingly, they should seek formal legal advice for matters of interest arising from this communication.

To find out more, chat with a member of New South Lawyers' Family Law Team today.