Following a four-day final hearing in a contested financial remedy application, the court was required to determine the issue of costs. The matter had been listed for three days but overran due to late compliance and evidential complications caused by the respondent husband. Written submissions were invited post-hearing.
Relevant Law
FPR 2010 r.28.3(5) sets the general rule that each party bears their own costs. However, the court may depart from this where a party’s conduct justifies it. The court also considered r.28.3(7), which sets out factors including non-compliance with rules or directions, and whether it was reasonable for a party to raise or pursue certain issues.
Issues
- The respondent failed to provide key disclosure, including valuations and financial documents, in time for trial preparation.
- The late service of a witness statement from the respondent’s accountant, not anticipated in the trial timetable.
- The inclusion of allegedly doctored bank statements suggesting a transfer of £260,000 to the applicant from a third party, which the court found were known to be false.
- The absence of open offers in advance of the final hearing.
- Whether the respondent’s open offer, made shortly before trial, was closer to the eventual outcome and whether this should mitigate against a costs order.
Challenges
The applicant (my client) and I lost valuable preparation time and incurred increased costs due to the respondent’s failure to comply with court directions and late disclosure. One day of the listed hearing was effectively lost, and significant time was spent addressing issues that should have been resolved before trial.
On the third day, the applicant was required to give additional evidence in response to allegations supported by fraudulent documents which the court found the respondent knew were not genuine.
The respondent’s position relied in part on late medical justification and a claimed failure by the applicant’s solicitors to finalise the bundle index, which the court rejected.
Decision
The court found that the respondent’s conduct had unnecessarily extended the final hearing, caused additional cost to the applicant, and warranted a departure from the usual rule on costs.
While indemnity costs were not awarded, the court made a costs order in the applicant’s favour, summarily assessing the respondent’s contribution at £10,000. This reflected the unnecessary time and cost generated by his non-compliance but also acknowledged that the applicant’s open position was unrealistic and that she had delayed making any formal offer.
The sum ordered was more than the entirety of counsel’s fees for the final hearing.