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Failure to disclose assets in family law cases can lead to costs penalties against parties, lawyers told

Man who engaged in ‘deceitful’ conduct ordered to pay estranged wife €160,000 legal costs

Warring parties in family law cases who fail to disclose assets, make unsubstantiated allegations against their former spouses and drag out cases may be at risk when it comes to legal costs, a leading family law barrister has said.

The superior courts have made clear that the conduct of parties before and during civil proceedings may be taken into account when deciding liability for costs, senior counsel Cormac Corrigan said in a paper entitled Costs and Family Law which he delivered to the annual conference of the Family Lawyers Association.

The normal rule concerning civil proceedings is that costs go to the winning side, but judges have discretion when it comes to awarding costs of part and all of such proceedings, Mr Corrigan said.

The courts have departed from the normal rule for reasons including whether it was reasonable for a party to raise, pursue or contest one or more issues in the proceedings; whether a successful party exaggerated their claim, made a payment into court; and the timing and terms of any offer to settle.

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Other factors include where the parties were invited by the court to settle the claim, by mediation or otherwise, and the court considered one or more parties unreasonably refused to engage in settlement discussions or mediation.

Mr Corrigan cited several court decisions concerning costs, including a 2022 judgment in a divorce case in which High Court judge Mr Justice John Jordan noted the “very high” legal costs charged, more than €521,000, represented about 12 per cent of the entire matrimonial assets.

The judge directed the husband to pay €160,000 of the wife’s legal costs, subject to possible adjudication, on the basis the threshold of conduct required to merit sanction was met. The man’s conduct of the case was “deliberate, ongoing, brazen and deceitful” and created a “high conflict case with a protracted course and substantial legal costs”, he said.

The man’s failure to make full and frank financial disclosure at an early stage, his ongoing failures over disclosure and his obfuscation placed the wife’s legal team and experts in the position where they believed they had to pursue disclosure “forensically”, the judge noted. An open offer made at a late stage by the man to settle the case was “wholly inadequate”.

In a separate 2022 judgment, the High Court’s Mr Justice Max Barrett addressed liability for costs of several distinct but related issues arising in a woman’s failed appeal of a Circuit Court family court decision in favour of her ex-husband concerning financial and custody matters.

Family court proceedings, the judge said, do not present the same “win/lose scenario” that is the hallmark of other court proceedings and rather involve a “most serious-minded” effort by all involved to resolve sometimes very challenging matters in as best a manner as can humanly, and lawfully, be done. He said children’s interests are a paramount consideration when that is required by law.

“I doubt there are many litigants who leave the family courts feeling that they have ‘won’,” he said. “I suspect most people leave feeling a little dazed by all the emotions that have been at play …”

There was nothing in the husband’s behaviour or in how he conducted this case that would incline the court to order him to pay some or all of the woman’s costs, the judge said.

Another case cited was a decision by the Court of Appeal last year upholding a costs order against a wife for unnecessarily elongating family proceedings with misconduct allegations against the husband. The court noted the woman did not pursue, but did not withdraw, “very serious” inter-spousal allegations at trial and had pursued “much less serious” allegations of misconduct by the husband in respect of the children.

Mr Corrigan also set out obligations imposed by the Legal Services Regulation Act 2015 on legal practitioners when it comes to costs, including giving clients what is known as a section 150 notice, written in “clear” language, concerning the conduct of the matter and the costs of each stage of the process.

Mary Carolan

Mary Carolan

Mary Carolan is the Legal Affairs Correspondent of the Irish Times