As set out in my previous two articles, legal fees in family proceedings have caused consternation not only in the legal press (most recently with Shield v Shield where costs exceeding £1m pounds arose simply to resolve preliminary issues), but also in the popular press (with Young v Young hitting the headlines when £6.5m was spent by one side alone).
Despite the strictures of the Family Procedure Rules and subsequent practice directions, disproportionate costs still seem to arise on an all too common basis.
The Jackson reforms did not apply to the overwhelming majority of family law proceedings (with the notable exception of TOLATA and Inheritance (Provision for Family and Dependants) Act proceedings).
The interesting question now is whether the Family Division will follow the other divisions and modify the rules to mirror the Jackson Reforms, in an attempt to dramatically change the arena of costs management.
The purpose of the Jackson reforms was to (1) promote access to justice and (2) control costs in civil litigation, with the overriding objective of ensuring costs are proportionate.
Why should most family law cases be exempt?
Perhaps the obvious answer is because of the “no order” presumption in respect of costs for most family disputes, as a result of which what is spent is largely a matter for the litigant and his solicitor. However, with the large-scale removal of public funding in family matters, access to justice is heavily compromised. Will huge pressure on the Family Division to follow suit not be inevitable?
Notwithstanding the “no order” presumption, the court requires costs estimates and costs information at all hearings on financial matters (although orders regarding costs are the exception, rather than the rule). The court is therefore to some extent monitoring costs, or at least ensuring that the sums involved are transparent, with a view (one assumes) to keeping them in check to some extent.
We know from CPR 44.3(5) that, in civil matters, costs incurred will be considered proportionate if they bear a reasonable relationship to:
- the sums in issue in the proceedings;
- the value of any non-monetary relief in issuing the proceedings;
- the complexity of the litigation;
- any additional work generated by the conduct of the paying party; and
- any wider factors involved in the proceedings, such as reputation or public importance.
All of these are equally applicable in the Family Division. There seems little justification in not adopting the Jackson reforms, save that budgeting in family law matters (required for any case with more than £25,000 at stake under the Jackson Reforms) is notoriously difficult due to the propensity for unexpected issues and/or whole new disputes to arise. For instance:
- Children Act issues may arise unexpectedly on divorce.
- Confidentiality and media issues may emerge.
- Financial claims ancillary to Children Act proceedings may be commenced.
- Domestic violence may be revealed as an issue.
In addition, the more inquisitorial role of the family judge may result in entirely new avenues being explored, which had not been contemplated at the outset.
Do these complications and additional avenues mean that the Jackson reforms are not fit for purpose for the Family Division?
Whilst the hard pressed family practitioner struggles with even a simple costs estimate – because of the often highly personal nature of correspondence, and/or statement evidence which in turn can lead to greater than anticipated costs – there does not seem to be any overwhelming reason in principle why the Jackson reforms should not apply.
If the government were canny, an opportunity may exist to introduce the Jackson Reforms and dramatically reduce the family justice system’s reliance on the courts by discouraging parties and their solicitors from invoking the court’s jurisdiction at all. Alternative Dispute Resolution would become increasingly attractive as an environment in which lawyers would regain control of the budget and the parties would have the opportunity to air their grievances without condemnation in costs.
A short review of advertisements on the internet shows how fixed fee offers are increasing in popularity in the family law world – notwithstanding the inherent uncertainties not seen as keenly in other divisions. The best possible way for family lawyers to keep within fixed fees is likely to be by taking control of the process by avoiding traditional court proceedings. Fixed fees for arbitration, mediation and the collaborative processes are already on offer, presumably because these are far easier to compute accurately.
Whilst fixed fees are unlikely to be imposed by legislation, they are certainly encouraged by the increasing emphasis on costs proportionality and the Jackson reforms. Should the reforms be extended to the Family Division, practitioners and parties would, in all probability, increasingly look to ADR to achieve greater costs certainty.
The time has come to address escalating legal fees in family matters, and adoption of the Jackson reforms in some form would surely be a big step in the right direction.