Who pays legal costs in family proceedings and how are costs awarded?

Introduction

Family proceedings in England and Wales carry significant cost implications. This article explains who typically pays legal costs, how courts decide on cost orders and practical steps parties can take to manage expense. The emphasis is on practical guidance for readers facing financial remedy, divorce and ancillary family litigation.

Who bears costs in family proceedings

The general rule is that each party pays their own legal costs. Courts expect parties to meet lawyers’ fees from their own resources unless there is a good reason to depart from that position. Exceptions arise where a court finds unreasonable conduct, frivolous claims, or deliberate failure to disclose assets.

Factors the court considers when awarding costs

The court exercises wide discretion and weighs a range of factors when deciding costs orders:

– conduct of the parties, including whether a party unreasonably prolonged proceedings or refused reasonable settlement offers

– the financial resources of each party and their ability to pay legal fees

– whether a party failed to comply with disclosure obligations or court orders

– the outcome of particular applications, such as interim relief or disclosure applications

– offers to settle under the Practice Direction on Settlement and Calderbank or Part 36 offers in civil elements of the dispute

Common types of costs orders

Courts use several forms of costs orders to achieve fairness and proportionality:

– usual order: each party bears their own costs, common in matrimonial finance cases where the parties have comparable means

– costs against the unsuccessful party: the loser pays some or all of the winner’s costs, more common in discrete contested applications than in final financial remedy hearings

– indemnity costs order: awarded where a party’s behaviour was egregiously unreasonable or in breach of duty; indemnity costs tend to be higher than standard costs

– costs payable out of the matrimonial pot: in high net worth cases the court may order that legal costs are paid from shared assets to avoid penalising the less solvent spouse

– specific costs orders: for example ordering a respondent to pay costs of a successful Norwich Pharmacal application or a costs order for non‑compliance with disclosure

Awards on interim applications

Interim hearings often attract immediate costs consequences. If an interim application succeeds and the court considers the opposing party acted unreasonably the judge may award costs of that application to the successful party. Conversely unsuccessful or unreasonably urgent applications can attract adverse costs.

Disclosure breaches and costs consequences

Failure to make full and frank disclosure remains a serious risk. The court can penalise non‑disclosure by awarding costs against the offending party, drawing adverse inferences, or adjusting a final financial order to compensate the innocent party. Prompt, honest disclosure reduces the risk of adverse costs orders.

Practical steps to manage costs exposure

Parties can take positive steps to mitigate cost risk:

– consider mediation and negotiation early to avoid contested hearings

– set realistic budgets with solicitors and agree staged work plans with decision gates

– make full and frank disclosure promptly to limit forensic and court expense

– use targeted applications rather than wide ranging discovery to reduce expert and review costs

– document settlement offers and use formal settlement offers to create costs consequences if suitable

Conclusion

Costs in family proceedings depend on conduct, resources and the specific issues litigated. While each party usually funds their own legal fees, the court can and does award costs to reflect unreasonable behaviour, disclosure failures and successful discrete applications. Early disclosure, a proportionate litigation strategy and serious consideration of settlement often produce the most cost effective outcome. For tailored advice parties should consult a specialist family lawyer familiar with the rules and practice in England and Wales.

At Alexander JLO we have many years of experience of dealing with all aspects of family law and will be happy to discuss your case in a free no obligation consultation. Why not call us on +44 (0)20 7537 7000, email us at info@london-law.co.uk or get in touch via the contact us button and see what we can do for you?

This blog was prepared by Peter Johnson on 1st December 2025 and is correct at the time of going to press. With over forty years of experience in almost all areas of law Peter is happy to assist with any legal issue that you have. He is widely regarded as one of London’s leading divorce lawyers. His profile on the independent Review Solicitor website can be found Here.

To follow up on any of the above please contact Guy Wilton of our family department. Guy has wide experience of acting for the firm’s clients, their family and their businesses. Guy’s experience as a lawyer started in the Northern and Welsh Circuits, including the Liverpool Courts, where he represented numerous clients after being called to the Bar, before opting to join Alexander JLO in 2017 and qualifying as a solicitor in 2024. He is a highly experienced family lawyer with a particular interest in financial remedy proceedings and child contact disputes.

Guy’s profile on the independent Review Solicitor website can be viewed here.