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Paying the Price of Love: Costs in Hague Cases

Sarah Lucy Cooper, barrister of Thomas More Chambers, considers the circumstances in which a respondent might secure a costs order against an applicant in Hague Convention abduction proceedings.

Sarah Lucy Cooper, barrister Thomas More Chambers.

Applying for costs in children proceedings is a rare occurrence and even more so in Hague abduction proceedings. However the author has had two such cases in under a year in which she has made successful applications for costs orders against applicants in Hague abduction proceedings. Neither case has been reported but the factual matrices of both sets of proceedings were highly unusual to say the least.  Essentially both applicant fathers initiated unmeritorious Hague applications against the backdrops of very contentious divorce proceedings. It is worth noting that both cases concerned the alleged retention rather than the removal of children.

In both cases the costs orders sought were against the applicant personally, rather than against the Legal Aid Agency. Both applicants also had plentiful assets in order to pay any costs order. It is worth remembering that all applicants in Hague proceedings are entitled to legal aid automatically, regardless of their means and, crucially in these cases, regardless of the merits of their cases. Any case passing through the Central Authority is not subject to any merits testing by the Central Authority whose duty is limited to processing the case rather than to assessing its merits. An unmeritorious application therefore is only weeded out at the final hearing in the High Court with the applicant in the meantime not having to pay any legal costs. At the same time, public funding for respondents in Hague applications has been dramatically cut back, leaving a respondent facing an unmeritorious application in a very weak position indeed and having to fund the costs of the litigation up front.

The law
The law on the making of costs orders in Hague proceedings is helpfully set out in the recent case of SB v MB (Costs) [2014] EWHC 3721 at paragraph 4:

"Both parties' legal teams agree on the framework of the law relating to the determination of costs in applications of this kind.  The following common ground has been identified:

i) The High Court has jurisdiction to award costs in first instance cases brought pursuant to the 1980 Hague Convention.  It is trite that it has such powers in applications made pursuant to the inherent jurisdiction though, for the reasons set out in my substantive judgment, that is of merely academic relevance here;

ii) Though there are few reported cases of cost orders having been made against applicants in this Hague Convention jurisdiction, the basis of the power to award costs was analysed and confirmed by Ryder J (as he then was) in EC-L v DM (Child Abduction: costs) [2005] EWHC 588 (Fam), [2005] 2 FLR 772.  There Section 11 of the Access to Justice Act 1999 was in focus and the Family Proceedings Rules 1991 that then applied. However, the principles identified in the case continue to hold, by parity of analysis, with the framework of the Family Proceedings Rules 2010; 

iii) In each case where a costs application is made there should be an inquiry into the merits EC-L v DM (Supra)

'it should be the expectation in child abduction cases that the usual order will be no order as to costs, but where a party's conduct has been unreasonable or there is a disparity of means then the Court can consider whether to exercise its jurisdiction in accordance with normal civil principles';

iv) It is misconceived to talk of a 'presumption' of 'no order' for costs at first instance in either Hague Convention cases or children cases more generally.  In Re J (Children) [2009] EWCA Civ 1350 Wilson LJ, as he then was, referred to the 'general proposition' of no order as to costs applied to a 'paradigm' situation.  In Re T (Costs: Care Proceedings: Serious Allegation Not Proved) [2012] UKSC 36 'reprehensible behaviour' or 'an unreasonable stance' were identified as markers for an adverse costs order;

v) FPR 2010, r 28.1CPR 1998 r 44.3 do not circumscribe the Judge's discretion on costs and invite the Court to consider 'all the circumstances'.  It should of course have regard to the matters set out at CPR rule 44.2 (4) and (5):

(4) 'in deciding what order (if any) to make about costs, the Court will have regard to all the circumstances, including –

a) the conduct of all the parties;

b) whether the party has succeeded on part of its case, even if that party has not been wholly successful;

c) any admissible settlement by a party which is drawn to the Court's attention, and which is not an offer to which costs consequences under para. 36 apply.

The conduct of the parties include –

d) conduct before, as well as during, the proceedings and, in particular, the extent to which the parties followed the practice direction – pre action protocol or any relevant pre action protocol;

e) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

f) the manner in which a party has pursued or defended its case or a particular allegation or issue;

g) whether a claimant has succeeded in a claim, in whole or in part, exaggerated its claim.

vi) It is generally undesirable to award costs where the consequence of such order is likely to exacerbate hostile feelings between parents to the ultimate detriment to the child."

In both cases the High Court decided that the applicant fathers' conduct had been unreasonable on the facts. This can be so even when an applicant withdraws an application dependent on the timing of the withdrawal. 

Public funding issues

In relation to the legally aided status of the applicants, the relevant legislation is now contained in section 26 LASPO 2012 plus the Civil Legal Aid (Costs) Regulations 2013.

"26 Costs in civil proceedings

(1) Costs ordered against an individual in relevant civil proceedings must not exceed the amount (if any) which it is reasonable for the individual to pay having regard to all the circumstances, including—

(a) the financial resources of all of the parties to the proceedings, and

(b) their conduct in connection with the dispute to which the proceedings relate.

(2) In subsection (1) "relevant civil proceedings", in relation to an individual, means—

(a) proceedings for the purposes of which civil legal services are made available to the individual under this Part, or

(b) if such services are made available to the individual under this Part for the purposes of only part of proceedings, that part of the proceedings.

(6) Regulations under subsection (5) may, in particular, make provision—

(a) specifying the principles to be applied in determining the amount of any costs which may be awarded against a party to whom civil legal services are made available under this Part,

(b) limiting the circumstances in which, or the extent to which, an order for costs may be enforced against such a party,

(c) as to the cases in which, and the extent to which, such a party may be required to give security for costs and the manner in which it is to be given,

(d) requiring the payment by the Lord Chancellor of the whole or part of any costs incurred by a party to whom civil legal services are not made available under this Part,

(e) specifying the principles to be applied in determining the amount of costs which may be awarded to a party to whom civil legal services are made available under this Part,

(f) as to the court, tribunal or other person by whom the amount of any costs is to be determined, and

(g) as to the extent to which any determination of that amount is to be final.

The Regulations drawn up are the Civil Legal Aid (Costs) Regulations 2013. At Regulation 6 it is clear that the old costs protection no longer subsists:

"Parts of proceedings to which cost protection does not apply7
6.  Cost protection does not apply in relation to—

(a) parts of proceedings for which civil legal services are provided in the form of—

(i) help at court;

(ii) legal help, help with family mediation or family help (lower), except in the circumstances described by regulation 7;

(b) parts of family proceedings for which civil legal services are provided in the form of—

(i) family help (higher);

(ii) legal representation."

Given these changes to the status of publicly funded litigants, the position of both applicant fathers was therefore no different from any other litigant in relation to the making of costs orders against them. Interestingly, the Legal Aid Agency refused to extend funding to one of the applicant fathers for the purpose of him providing further submissions on costs.

Costs orders against the Lord Chancellor

To complete the circle, the author includes the relevant regulation in relation to obtaining a costs order against the Lord Chancellor. As can be seen, unsurprisingly, there are huge hurdles to be overcome:

"10.—(1) This regulation applies where relevant proceedings are finally decided in favour of a non-legally aided party.

(2) Subject to paragraphs (3) to (8), the court may make an order for the payment by the Lord Chancellor to the non-legally aided party of the whole or any part of the costs incurred by that party in the proceedings (other than the costs that the legally aided party is required to pay under a section 26(1) costs order).

(3) An order under paragraph (2) may only be made if the following conditions are satisfied—

(a) a section 26(1) costs order is made against the legally aided party in the proceedings, and the amount (if any) which the legally aided party is required to pay under that costs order is less than the amount of the full costs;

(b) the non-legally aided party makes a request—

(i) under regulation 16(2), within three months of the date on which the section 26(1) costs order is made; or

(ii) after the expiry of the time limit under regulation 16(2), where there is a good reason for the delay in the request being made;

(c) as regards costs incurred in a court of first instance, the following conditions are met—

(i) the proceedings were instituted by the legally aided party;

(ii) the non-legally aided party is an individual; and

(iii) the court is satisfied that the non-legally aided party will suffer financial hardship unless the order is made; and

(d) in any case, the court is satisfied that it is just and equitable in the circumstances that provision for the costs should be made out of public funds.

(4) Where the legally aided party receives civil legal services in connection with only part of the proceedings, the reference in paragraph (2) to the costs incurred by the non-legally aided party in the proceedings is to be construed as a reference to so much of those costs as is attributable to the part of the proceedings for which civil legal services are provided.

(5) Where a court decides any proceedings in favour of a non-legally aided party and an appeal lies (with or without permission) against that decision, any order made under this regulation must not take effect—

(a) where permission to appeal is required, unless the time limit for an application for permission to appeal expires without such an application being made;

(b) where an application for permission is made within the time limit, unless the application is refused; or

(c) where permission to appeal is granted or is not required, unless the time limit for appeal expires without an appeal being brought.

(6) Subject to paragraph (7), in determining whether the conditions in paragraph (3)(c)(iii) and (d) are satisfied, the court must have regard to the resources of the non-legally aided party and of that party's partner.

(7) The court must not have regard to the resources of the partner of the non-legally aided party if the partner has a contrary interest in the proceedings.

(8) Where the non-legally aided party is acting in a representative, fiduciary or official capacity and is entitled to be indemnified in respect of costs from any property, estate or fund, the court must, for the purposes of determining whether the conditions in paragraph (3)(c)(iii) and (d) are satisfied, have regard to the value of the property, estate or fund and the resources of any person who has a beneficial interest in that property, estate or fund."

As a final point, given that both cases also involved contested financial remedy proceedings, it is correct to say that the issue of the costs incurred in the Hague proceedings could also amount to "conduct" to be considered under section 25 Matrimonial Causes Act 1973 which is an alternative way to proceed.