The cost of failing to negotiate openly in financial remedy proceedings

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. Therefore, in most cases, each party will pay for the legal costs that they themselves incur.

However, the Court can make an order requiring that one party pays the costs of the other where it considers it appropriate to do so because of the conduct of a party. This conduct includes a party failing to openly negotiate in a reasonable way in financial proceedings.

This is demonstrated in the recent case of OG v AG [2020] EWFC 52. In this case, the sum that the wife received was reduced by £50,000 to reflect her unreasonable and untenable open negotiation stance. The Judge said that:

“[i]f, once the financial landscape is clear, you do not openly negotiate reasonably, then you will likely suffer a penalty in costs”.

This serves as clear warning to those engaged in financial proceedings that refusal to negotiate openly in a reasonable way in financial proceedings will likely result in a costs penalty against them.

Katherine Parker is an associate solicitor in the Family Department at Barker Gotelee Solicitors in Ipswich.

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