Why You Might Need to Worry about Indemnity Costs in a Family Court Proceeding

The court system across Australia considers a wide variety of different cases on a daily basis, ranging from civil to criminal, from corporate to family law. In many of these cases a judge will make an issue requiring the "losing" party to cover the legal costs of the other party. In fact, this is very commonplace in most types of court proceedings, except for family law. If you are thinking about bringing a case against somebody else in front of a family law judge, what should you bear in mind with regards to your costs?

Are Costs Awarded?

Ordinarily, the Family Law Act requires that each party pay their own legal costs in the majority of circumstances. However, there are some exceptions and several situations where judges may look at this in a different light. One of these is related to a party's conduct during proceedings, and the judge will often consider how a particular party behaved in the court, whether they were obstructive or compliant. A judge may also ask whether or not the proceedings brought were actually necessary or whether the case was trivial.

What Can Go Wrong

In recent court proceedings, a judge found against a wife who had brought a claim to try and restrict the husband's legal team from acting on his behalf, due to a "conflict of interest." This case did not have any merit and she was not successful. Consequently, the husband decided to seek an order for her to pay his costs. In this case, a judgement was indeed made for the plaintiff to pay the defendant's costs. Not only that, but the judge also required that the cost be calculated on "an indemnity basis," which increased her exposure.

Indemnity Basis

Typically, costs are awarded on an indemnity basis where the party should have known that they were unlikely to succeed with a case, especially if they'd been properly advised. If the court considered that they had wasted the time of all involved, this is also grounds for increasing their financial "punishment."

Sometimes, a lawyer for one of the parties will try to put the other off by asserting that they will be seeking costs on an indemnity basis. This is often bluster, but it can nevertheless be off-putting in the circumstances.

Pause before Acting

Are you thinking about bringing a case in family court, but are not really sure of your ground? Is there a realistic chance that it could be considered trivial? If so, then you should pause. Have a word with a good family law solicitor first, before you proceed.


Share