How much does a divorce cost?
Surely the questions most frequently heard by lawyers involved in divorce proceedings and, frustratingly for lawyers and clients alike, the answer is invariably uncertain. Recent changes in the law however have meant that, certainly in respect of cost, it should be easier to predict. If a client and lawyer together embrace the non-adversarial nature of family proceedings and strive from the outset to keep costs to a minimum and negotiate a reasonable and fair agreement, a spouse can be reasonably confident that the cost of divorce will be restricted to their own legal costs and that their share of the matrimonial “pot” will not be depleted by unnecessary or unreasonable legal fees incurred by the other party to the divorce.
Prior to the new costs rules the question of cost was more uncertain. It was not uncommon for a party who had acted entirely reasonably and strived hard to minimise costs and reach a settlement to find themselves forced into a contested Court hearing because the other party had been obstructive or simply refused to enter into anything other than token negotiations at the eleventh hour. To add insult to injury then, having endured perhaps a full day or more of evidence to enable the judge to adjudicate on the issues between the parties, the other side then produces a letter offering a resolution in similar terms and the judge is obliged to award costs their favour. The result being that a carefully considered decision of the judge is side-lined by one party, who had acted fairly and reasonably throughout, having to pay the costs of both parties out of their share; a large proportion of which, arguably, was incurred unreasonably or unnecessarily by the other.
In English law, costs, although ultimately at the discretion of the judge, in general will follow the event meaning that if you ‘win’ you can expect to have your costs paid by the “loser”. Prior to 2006 the situation in divorce cases mirrored that principle; if one side did not “beat” an offer previously made in correspondence prior to the Court hearing they were liable to bear the costs of the offering party. The difficulty in dealing with the financial issues on divorce however is that the range of issues and factors the Courts are entitled to take into account are wide and complex. Offers in correspondence between lawyers had therefore come to be seen as perhaps more a matter of luck than judgment. In addition, the concept of a ‘winner’ in such cases seemed at odds with the idea of “no fault” divorce and the non-adversarial nature of family proceedings in general. Even in cases where the breakdown of the marriage was due to the adultery or unreasonable behaviour of one party the Courts would not attribute blame by penalising a party financially save in the most extreme cases, yet an arguably ‘blameless’ party could be left in a worse financial position than a spouse who had taken an adversarial approach, running up vast legal bills and doing little or nothing to try to preserve the available funds for the parties’ benefit.
Under the new costs rules the judge will be aware of offers made in correspondence and costs will be part of the main court hearing, not, as previously, a separate issue to be decided once the judge had ruled on the substantive issues between the parties. The general rule now is that there should be no order for costs meaning that each party will pay their own out of their share of the assets but the Court is entitled to make orders that one party pays the costs of the other in a range of scenarios. These scenarios in the main relate to the parties’ conduct prior to and during the proceedings and can apply to one or more particular issues in dispute rather than to the total cost of the litigation as previously. Regardless of the specifics of offers made during the course of proceedings therefore, the Court can effectively penalise a party who refuses to negotiate in the early stages, or at all, or who is difficult, obstructive or pursues issues with little or no merit or supporting evidence.
Divorce is an extremely stressful experience and even in cases where the separation itself is amicable, emotions often run high when it then comes to sorting out the matrimonial finances. In such circumstances it is, understandably, easy to lose sight of the fact that every penny spent in legal fees is a penny less in the matrimonial “pot” and frequently it costs more to argue the point than the asset in issue is worth. Indeed it is not unusual for relations between the parties to have deteriorated to such a point that clients, whilst appreciating this point, say they would rather the lawyers had it than their ex husband or wife “get their hands on it”! The difference now however may well be that, in such circumstances the other spouse will “get their hands on it“ in any event and the party who insisted on pursuing the issue will be ordered to pay the costs of both lawyers out of their share.
As with any change in the law it takes time for cases to come to Court so judicial guidance can be given enabling lawyers to say with any certainty whether a particular set of circumstances might give rise to their client being ordered to pay their spouses costs. The possible scenarios set out in the new rules however are sufficiently wide that for the time being both clients and lawyers would be well advised to err on the side of caution; take the first available opportunity to propose a reasonable settlement, endeavour to keep emotions, and costs, in check and, above all, negotiate, negotiate, negotiate!
