Costs Orders as Punishment

A judge in a family court case reminded lawyers of their duty to advise clients that an ‘untenable case risks adverse costs orders being made’.  

In HO v TL (costs) Mr Justice Peel made an order for £7.75m in the wife’s favour but ordered she pay £100,000 towards the husband’s costs as she ‘did not negotiate reasonably until late in the day’. The judgment said the wife sought £17.2m despite being ‘sufficiently well informed…to know that such a figure was unsustainable’ and acknowledged that ‘lawyers must advise their clients accordingly’.

The judge said: ‘In my judgment, certainly until September 2023, W maintained an unrealistic and speculative approach. She did not modify her position for months. This was not “reasonable open negotiation”. It was unreasonable. Parties must understand that to run an untenable case risks adverse costs orders being made....Perhaps more importantly, lawyers must advise their clients accordingly. Of course, they act on instructions, but it is, in my view, incumbent on the legal team to explain clearly that a failure to negotiate reasonably on an open basis carries costs risks. If the party persists in in an unreasonable stance, they can have no complaints if they are on the receiving end of a costs order.'

Ordering that the wife should have £100,000 deducted from her award, the judge said: ‘The message must get across that although the starting point is no order as to costs, the courts are increasingly willing to depart from that so as to do justice to the party who has been put to unnecessary costs by the other party’s overstated proposals.’

Nicholas Bond

Published on 25/01/2024