Whilst the parties are busy arguing over relatively small issues - such as to whom a cheque for £600 was paid to from an account - the legal costs involved in proving the point have a nasty habit of rising out of all proportion to the amount in dispute. A large part of that £600 can easily be swallowed up by a few phone calls and letters made by a solicitor.

In the past, Judges have tried to keep a firm hand on solicitors who waste costs with strict orders preventing them from blowing cases out of proportion and then delivering withering judgments if they continue to do so. Despite this, however, the issue of costs has continued to cause problems. The new rules mean that couples will have to foot their own legal bills rather than hoping to be able to push them all onto the other side.

Since the early 1970’s, the courts have followed the principle that any offers to settle between the parties were made on a confidential basis, without the Judge knowing about them. It was only once the Judge had made his decision about who should get what out of the family pot, that he would be shown the offers. The Judge would then have to award costs against any party who had rejected a “reasonable” offer – in other words, an offer that was the same or less than the order he had just made.  The “loser” would then have to pay not only his own legal costs, but those of his former spouse.

That all seemed fair enough in principle but in practice it was often difficult to say for certain whether any offer was as good as the order. The upshot was that costs orders tended to favour the wife more often than the husband who would understandably feel a sense of injustice!

The Judges themselves didn’t much like the rules. They often complained that after coming to painstaking and difficult decisions about the division of a couple’s finances, their finely balanced figures were wrecked by the imposition of the costs orders the old rules obliged them to make.

The new rules introduce “open” as opposed to confidential offers, allowing the Judge to know what each party’s position is and how reasonable they have been in their negotiations throughout the process. The Judge can still take into account bad conduct should he so wish with the terms of his order. Bad conduct could include things such as pushing on with ill-founded allegations or ignoring a court’s directions in the run-up to a hearing. They also allow the Judge to take into account the exact level of each party’s costs when reaching his finely balanced order with no danger of it being wrecked by costs at the end.

There is now a powerful incentive for both sides to keep their legal costs down. Which can only be a good thing. The only question is, why did no-one think of this until now?

Philippa Pearson is a leading family lawyer at Norris and Miles solicitors of Tenbury Wells in Worcestershire and the author of the Lawpack Separation and Divorce Kit.

Further Information
Do I need a Solicitor to manage my Divorce?
What are my rights to money and property when my marriage ends?
Are mothers always awarded custody of the children?