Costs in Financial Remedy Proceedings

Last updated: January 2026

Quick Answer

In financial remedy proceedings, the general rule under Family Procedure Rules Part 28 is that each party pays their own costs regardless of outcome. According to Resolution, costs orders are made in only 10-15% of financial remedy cases—typically for litigation misconduct such as non-disclosure, ignoring reasonable offers, or failing to comply with court directions. Final hearings cost £20,000-50,000 per party on average.

The General Rule: No Order as to Costs

"The general rule in financial remedy proceedings is that the court will not make an order requiring one party to pay the costs of another party." — Family Procedure Rules 28.3

Costs Rules Comparison

Jurisdiction	General Rule	Winner Recovers Costs?
Civil litigation (England)	Loser pays winner's costs	Yes
Commercial litigation	Loser pays	Yes
Family Law (Financial Remedy)	No order as to costs	No

This surprises many litigants—even complete success doesn't guarantee cost recovery.

Why This Rule Exists

Reason	Explanation
Shared matrimonial pot	Both parties' lawyers are paid from family assets
Settlement encouragement	Removing cost risk promotes negotiation
Legitimate interests	Both spouses have valid claims to fair division
No wrongdoer	Seeking entitlement isn't misconduct

"Matrimonial assets fund both sides. Ordering costs against one party often just moves money around within what's essentially a shared pool." — Family Law Week

When Costs Orders Are Made

Grounds for Departure from "No Order" Rule

Ground	Examples
Disclosure failures	Incomplete Form E, hidden assets, refusing questionnaire answers
Ignoring reasonable offers	Refusing FDR settlement, proceeding when offer met outcome
Causing unnecessary costs	Late compliance, multiple avoidable applications, adjournments
Unreasonable positions	Maintaining hopeless claims, rejecting judicial indication

The "Conduct" Test

Courts ask two questions:

Question	What Courts Examine
Was conduct unreasonable?	Behaviour no reasonable party would adopt
Did it cause unnecessary costs?	Opponent incurred expenses they shouldn't have

Reasonable vs Unreasonable Conduct

Conduct Type	Example	Costs Consequence
Reasonable	Reject 40/60, achieve 55/45 at trial	No costs order—entitled to seek outcome
Unreasonable	Reject 50/50, achieve 50/50 after £50k hearing	Likely costs order—spent money achieving what was offered

Calderbank Offers

"A Calderbank letter marked 'without prejudice save as to costs' creates a benchmark for costs arguments if the outcome beats the offer." — The Law Society

Calderbank vs Part 36 Comparison

Feature	Calderbank (Family)	Part 36 (Civil)
Automatic costs	No	Yes
Court discretion	Full	Limited
Timing protection	From date of offer	21 days after offer
Requirements	Reasonable and beaten	Procedural compliance

Effective Calderbank Letters

Element	Requirement
Marking	"Without prejudice save as to costs"
Specificity	Clear, detailed terms
Reasonableness	Offer must be one opponent should accept
Outcome	Must be beaten (not merely met) at trial

Open Offers and FDR

The FDR Dynamic

Stage	What Happens
Pre-FDR	Both parties file open proposals
FDR hearing	Judge gives non-binding indication
Negotiation	Parties negotiate with indication in mind
Final hearing	Different judge decides (if no settlement)

Strategic Use of FDR Offers

Scenario	Costs Implication
Outcome better than your offer	Argument opponent should have accepted
Outcome same as opponent's offer	Risk of costs against you from FDR
Rejected judicial indication	May face costs if indication matched outcome

"The FDR indication isn't binding, but ignoring it completely is risky. Courts notice when parties reject reasonable indications and achieve nothing better at trial." — Judicial guidance

Types of Costs Orders

Order Type	When Used	Effect
Costs of the hearing	Misconduct caused specific hearing	Pay opponent's costs for that hearing
Costs in the case	Interim stages	Whoever "wins" overall gets these costs
Costs reserved	Decision deferred	Same judge decides later
Costs thrown away	Wasted preparation	Compensation for abandoned hearings
Indemnity costs	Severe misconduct	More generous assessment basis

Standard vs Indemnity Basis

Assessment	Doubt Resolution	Recovery Rate
Standard basis	Resolved against receiving party	~60-70% of actual costs
Indemnity basis	Resolved in favour of receiving party	~80-90% of actual costs

Assessing the Quantum

Method	When Used	Process
Agreed	Parties negotiate	Quickest and cheapest
Summary assessment	End of hearing	Judge decides amount immediately
Detailed assessment	Substantial disputes	Costs judge examines all work done

Typical Costs by Stage

Stage	Typical Range	Notes
Form E preparation	£3,000-8,000	Complexity dependent
FDA hearing	£3,000-6,000	Including preparation
FDR hearing	£5,000-12,000	Including bundles, position statements
Final hearing	£20,000-50,000	Per party, 2-3 day hearing

Protecting Yourself on Costs

Strategic Actions

Action	Purpose
Make reasonable offers	Create Calderbank protection
Document offers	Evidence of settlement attempts
Comply with directions	Avoid costs orders for non-compliance
Provide full disclosure	Prevent adverse inferences and costs
Engage genuinely at FDR	Demonstrate settlement focus

Recording Unreasonable Conduct

Document Type	What to Record
Correspondence	Unreasonable positions, refusals
Timeline	Disclosure delays, non-compliance
Cost impact	Additional costs caused by conduct

Legal Aid and Costs

Situation	Costs Position
Legally aided opponent	Protected from most costs orders
Self-funded vs legally aided	Unfair disparity—self-funded bears risk
Means to pay	Costs only recoverable if opponent has means

"Even if entitled to a costs order, you may not recover anything from a legally aided party unless they have means to pay." — Legal Aid Agency

Costs Budget Management

Budget Categories

Category	Includes
Solicitor costs	Hourly rates, correspondence, preparation
Counsel fees	Hearings, paperwork, conferences
Expert costs	Valuers, actuaries, forensic accountants
Court fees	Application fees, hearing fees
Disbursements	Copying, bundling, travel

Budget Tracking by Stage

Stage	Budget Allocation
Form E preparation	15-20% of total budget
FDA preparation	10-15%
FDR preparation	20-25%
Final hearing preparation	40-50%

The Proportionality Test

Before proceeding to contested hearing, assess:

Question	Consideration
Disputed amount	Difference between your offer and theirs
Hearing cost	Likely £20,000-50,000 per party
Realistic range	Probable outcomes from court
Value judgment	Is spending worth potential improvement?

Example: If the difference between offers is £30,000 and hearing costs £40,000 per party, both parties spend more than the dispute is worth—regardless of outcome.

Documenting Costs in Your Bundle

Organising Costs Evidence: Building a costs argument requires comprehensive documentation. BundleCreator.co helps you organise correspondence chronologically, cross-reference offers with outcomes, and maintain proper pagination for costs schedules.

Required Documentation

Category	Documents Needed
Conduct evidence	Correspondence showing unreasonable behaviour
Non-compliance	Timeline of direction breaches
Disclosure failures	Record of missing/late disclosure
Offers	Open offers, Calderbank letters, dates
Costs schedule	Detailed breakdown by work type and rate

Bundle Organisation for Costs Arguments

Section	Contents
F1	Costs schedule with detailed breakdown
F2	Chronology of conduct issues
F3	Correspondence evidencing unreasonable positions
F4	Calderbank letters and open offers
F5	Responses to offers

Costs and Settlement Strategy

Understanding costs rules should encourage settlement:

Reality	Strategic Implication
Costs rarely recovered	Budget for paying own costs
Disproportionate spending visible	Courts notice wasteful litigation
FDR designed for settlement	Engage genuinely
Trial costs often exceed dispute	Calculate settlement value

Settlement Calculation

Factor	Consideration
Offer gap	£X difference between positions
Costs to trial	£Y per party
Net position	If costs > gap, settlement saves money
Risk factor	Uncertain outcome adds to settlement value

Frequently Asked Questions

Do I get my costs if I "win" my financial remedy case?

No, not automatically. The general rule is no order as to costs—each party pays their own regardless of outcome. Costs orders are made only for litigation misconduct (typically 10-15% of cases).

What conduct leads to costs orders?

Failing to provide disclosure, ignoring reasonable settlement offers, causing unnecessary costs through non-compliance, and maintaining positions with no reasonable prospect of success.

What is a Calderbank letter?

A "without prejudice save as to costs" offer that creates a benchmark for costs arguments. If you beat your Calderbank offer at trial, you have a strong argument for costs from the date of the offer.

How much do financial remedy hearings cost?

FDA hearings: £3,000-6,000. FDR hearings: £5,000-12,000. Final hearings: £20,000-50,000 per party. Costs vary significantly with complexity and counsel seniority.

Should I accept an offer to avoid costs risk?

Consider the proportionality. If the difference between positions is less than likely hearing costs, settlement often makes financial sense regardless of who might "win."

Can I recover costs from a legally aided party?

Rarely. Legal aid provides costs protection. Even with a costs order in your favour, recovery depends on the legally aided party having means to pay—which is often unlikely.

Your Costs Protection Checklist

Document all offers – create clear paper trail
Make Calderbank offers – "without prejudice save as to costs"
Comply with all directions – avoid costs for non-compliance
Provide full disclosure – prevent adverse findings
Engage at FDR – demonstrate settlement focus
Record opponent's conduct – evidence for any costs application
Track your spending – budget by stage
Organise costs evidence – use BundleCreator.co for proper indexing
Calculate proportionality – is fighting worth the cost?
Consider settlement value – costs avoided are money saved

This guide provides general information about costs in financial remedy proceedings in England and Wales. It is not legal advice. For advice specific to your situation, consult a qualified family solicitor.

Sources:

Ready to Create Your Bundle?

Ready to create your Financial Remedy Bundle?

Court Fee Calculator

Bundle Checklist Generator

PD27A Compliance Checklist

Watch the short walkthrough

Getting Started with BundleCreator

Creating Your First Bundle

Using Templates Effectively

About the Author

Stevie Hayes