This article contains a summary of the way costs are handled in divorce and ancillary relief cases. It also contains useful tips and advice on keeping costs to a minimum.
Costs Overview
Divorce (Petition) Costs
Usually the Respondent will be ordered to pay the costs of the Petition unless the Petitioner has not asked for them in the Petition, or later agreed to drop such a request, or if the divorce is based on two years' separation and consent.
Financial (Ancillary Relief) Costs
In settlement discussions costs are a matter for negotiation. If agreement can't be reached and the matter proceeds to final hearing once the court has given judgment, the question of costs will have to be decided.
In respect of financial proceedings issued on or after 3 April 2006, the starting point is that each party should bear their own costs of the proceedings, unless there has been litigation misconduct by one of the parties, in which case the other party may be able to recover the costs directly referable to that misconduct.
In relation to financial proceedings begun before 3 April 2006, the old system of costs will continue to apply. Under the old system failure to negotiate sensibly could result in costs orders being made which took that failure into account. If the court awarded a party more than he or she was offered by the other side, the court was obliged, unless it considered it would be unjust, to order the other side, which had effectively lost, to pay that party’s costs from 28 days after the offer was made.
Where the court awarded a party more even than he or she was prepared to accept in their ‘without prejudice’ offer, the court might, if it was just to do so, order that the costs awarded from 28 days after the offer should be on an indemnity basis (so that a higher percentage of the actual costs would be paid), and/or with interest of up to 10% over base rate.
The question of whether such a costs award might be considered just or unjust by the court under the old system will depend on a number of factors, including whether the other party is able to pay such an order, the information available to the party when he or she was considering the offer, and the overall conduct of the parties.
SAVING LEGAL COSTS
1 Choosing a solicitor
1.1. The best way of choosing a solicitor is probably personal recommendation, but if you do not know anyone, it is recommended that you choose a lawyer who is a member of Resolution, who are committed to a Code of Practice designed to make divorce less confrontational. Although membership is not an absolute guarantee of competence, potential members do have to display proven expertise in this field. Another approach is to use a solicitor who is accredited in collaborative law. Either way, your lawyer should be committed to reaching a settlement by negotiation, which is usually cheaper and less stressful.
1.2. Get quotations from two or three firms and ask about their hourly rate.
1.3. Ask your prospective lawyer if (s)he is willing to represent you in straightforward cases without using a barrister, which merely adds to the costs.
2 Avoid the rotweilers
If you are told that so-and so is a ‘ rotweiler ‘ then you need to be very careful.. You may get the type of lawyer who will see you as a cash cow and will fight to the end - the end of of your money.
3 Consider alternative dispute resolution
3.1. There are alternatives to Court proceedings for resolving financial disputes, the main ones being mediation and collaborative law.
3.2. Neither is likely to work if the spouses are already at loggerheads, or if the gap between their respective positions is very wide.
3.3. Mediation involves meetings with a trained counsellor who will seek to broker a settlement between the parties. If agreement is reached then it is submitted to the Court for approval and becomes legally binding.
3.4. With collaborative law, the parties both hire lawyers who try and reach agreement by negotiation. If negotiations break down, both parties must then appoint a new lawyer to handle the resulting litigation. The advantage is that the lawyers have no financial interest in involving their clients in court proceedings ; the disadvantage could be that changing lawyers in mid stream if negotiations fail can add to the overall cost. There is a very useful discussion on the subject on this website.
3.5. Collaborative law seems to be much more common in the United States, but is attracting increasing interest in the UK.
3.6. One possibility is to use the Court’s own procedures;. At some stage you will get a hearing before a district judge which is called a Financial Dispute Resolution or FDR. The judge who conducts the hearing will try and narrow down the areas of dispute and (s)he will give the parties an idea of what (s) would do ; but if the case proceeds to a full hearing a different district judge will conduct it. It can be, therefore, one way of bringing an independent legal mind to bear on the issues at an early stage, and it has the potential advantage that if the case does not settle, the FDR is part of the process anyway, so no time and little expense is lost. Quite a few cases do settle at FDR stage, so using it as a form of arbitration could be worth considering if the area of disagreement is limited.
3.7. There is much to be said for hiring a lawyer even if you intend to use mediation, to advise you as to the likely outcome, so that you are in a better position to evaluate any proposals from the mediator/
4 Avoid using your solicitor as an emotional crutch
Some social pleasantries cannot be avoided, but do not discuss whether Steve McClaren should play Beckham, Lennon or Pennant at right midfield ; and if it is counselling and support you need, try your parish priest or a trusted friend or adviser. You are buying your solicitor’s knowledge and experience, and this does not come cheap. Stick to asking for legal advice if you can.
5 Do your homework in advance
5.1. A solicitor will tell you that (s)he cannot advise you without a full and complete disclosure of the financial positions of the parties. This is perfectly correct. Even small details can tip the balance and lead to a different outcome. It is essential that you provide your lawyer with up to date and complete facts.
5.2. So you will have to get together a fair bit of information. The key is knowing what information is likely to be asked for and making advance preparation.
5.3 Examples of the kind of information your solicitor will want are :
Your marriage certificate; Your most recent P60; A valuation of the matrimonial home, if you own it ; If you own your own business, two year’s audited accounts ;
And so on. A fuller list appears later. The more complicated the information, the greater the degree of disclosure required, but this paper is not written primarily with the super rich in mind.
5.4. Some of this information can take time to put together. You should be aware that, once the procedure is set in motion, there are strict timetables and potential sanctions for delay. The trick , therefore, is to have your information marshalled and in the hands of your lawyer before you even start.
5.5. There is another potential advantage. In straightforward cases, if the District judge at the first hearing has all the information (s)he needs, the initial appointment can be treated as an FDR - one less hearing, and more reduced expense.
5.6. There is something to be said for the idea of typing out your basic details ( like your names, children, address, phone and E mail contact numbers , details of the marriage ) so that you can hand them over to your lawyer. It saves note-taking and therefore reduces cost.
6 Don’t be too scared of Form E
6.1. Form E is a financial statement, and both you and your spouse have to complete one.
6.2. It is a very complicated form, but it may not be quite as bad as it looks. In most cases the information required is quite straightforward.
6.3. If you can overcome the average Englishman’s dislike of filling in forms, it is a good idea to download Form E and try to fill it out yourself. Even if you can’t complete all of it, it will save you time and money if you can do 80% and leave your solicitor to cast an eye over it and help you complete the parts of the form which are not clear to you.
6..4. Once you have filled in Form E, remember that the other side will have a very close look at it. If you can, try and examine it from the other side’s point of view ; try and make sure that what you say is supported by documentation and receipts ; go through your bank statements and look the receipts side of your statement, and make sure you can explain what’s there. If any items require explanation, provide it up front. Ideally, what you want a situation where your Form E is so complete that you avoid a whole list of questions from the other side, which takes time and of course, costs money.
7 Don’t tell porkies
7.1. There is a great temptation to be economical with the truth in this area. Many spouses lie about their means or try to conceal assets or income. So much so that lawyers even have a name for it - the ‘ crock of gold syndrome ‘ - the belief that the other party has assets which (s)he is not disclosing.
7.2. The potential disadvantages with hiding assets or income is that if the truth comes out during the hearing, it can do your cause a great deal of harm. It is quite possible that the Court would make an order for costs against you. It can also be damaging if something comes out in Court that your advocate does not know about and for which (s)he is totally unprepared.
7.3. The advantage of being truthful is firstly, that the Court will like you for it, and getting the judge on your side is half the battle. Secondly, a truthful statement is almost impossible to attack. A well prepared and adequately documented statement hangs together well. It can avoid a whole lot of tedious questionnaires from the other side which again adds to the overall cost.
7.4. This advice may not be acceptable to everyone, but remember that your ex to be may hire a private detective to rummage through your dustbin, may intercept post and do all sorts of dirty tricks - so beware ! Also remember that if your spouse finds out that you haven’t been truthful, it is possible that an order could be set aside - as was the case, for example, where a wife married almost before the ink on her divorce was dry, and had failed to disclose her intentions.
8 Be clear what you want
It does help if you are clear in your own mind about the things that are most important to you and what matters and what is less important. It gives your solicitor the freedom to do a horse deal which gives you what you want in exchange for an insignificant concession elsewhere.
9. Read all about it
Try and find out as much background information as you can. It is much cheaper to read about divorce in your own time than have your solicitor explain it to you at £150 and hour or thereabouts. One of the aims of a site like wikivorce should be to provide that information, but to be fair, there are many websites, some from solicitors, which seek to do the same thing. As with any website, there is always the danger that information can become out of date, so check when the information was posted !
10. Keep a sense of balance
Divorce is not a game. It is not an exercise in point scoring at the expense of your ex to be. It is not a means of getting your own back on your spouse. The objective is to produce a settlement that is as fair to both parties as possible. Unfortunately, in the vast majority of cases, divorce will mean a diminution in living standards. Always balance what you want to achieve against the costs of achieving it. It is plain daft to spend £10,000 arguing about an asset worth £5000. Don’t forget, the more money you spend on lawyers, the less there is for you. And remember, it gets better. Time is a great healer. Your world may seem in ruins, but look forward, plan for the future, And if you have children, please remember them and keep their interests well in mind.
The typical information likely to be required by a Court is :
The last three payslips and the most recent P60 ; Bank statements for the previous 12 months ; Up to date valuations of property, insurance policies and significant assets ; your most recent statement from your mortgage lender ; if you are in business, your accounts for the past two years ; the valuation of any pensions, if there are any . It is a good thing if you produce written evidence to back up what you say. Form E will serve as a complete checklist of the information which will be required.
