Practice Direction 28A (PD 28A) is a specific set of guidelines that forms part of the Family Procedure Rules 2010 in England and Wales. This direction deals with costs in financial remedy proceedings in cases of divorce or dissolution of civil partnerships. The general rule of costs in family law cases is that each party bears their own costs, except under specific circumstances.

The primary goal of the PD 28A is to ensure that these proceedings are conducted fairly, efficiently, and cost-effectively keeping the welfare and financial stability of all parties in focus.

Key Features of Practice Direction 28A

Cost management:

Practice Direction 28A requires parties to regularly provide estimates of their costs. This allows the court to oversee and manage the financial aspects of the case actively, ensuring that spending is kept within reasonable limits.

Filing of costs estimates:

At various stages of the proceedings, parties must file formal estimates of their past and future costs. These estimates help the court make informed decisions about case management and whether any interventions are necessary to control spending.

Costs Hearings:

Special hearings can be held to address disputes over costs. These are particularly useful when there is a significant discrepancy between the costs incurred by the parties, or when costs are perceived to be disproportionate to the value or complexity of the case.

Conduct of Parties:

Practice Direction 28A places significant emphasis on the conduct of the parties throughout the proceedings. Unreasonable conduct, such as failing to comply with rules or directions, refusing to cooperate in the preparation of necessary documents, or prolonging proceedings unnecessarily, can lead to financial penalties, such as adverse costs award made by the court.

Under 4.4 of Practice Direction 28A, it is stated:

“In considering the conduct of the parties for the purposes of rule 28.3(6) and (7) (including any open offers to settle), the court will have regard to the obligation of the parties to help the court to further the overriding objective (see rules 1.1 and 1.3) and will take into account the nature, importance and complexity of the issues in the case. This may be of particular significance in applications for variation orders and interim variation orders or other cases where there is a risk of the costs becoming disproportionate to the amounts in dispute.

The Court will take a broad view of conduct for the purposes of this rule and will generally conclude that to refuse openly to negotiate reasonably and responsibly will amount to conduct in respect of which the Court will consider making an order for costs. This includes in a ‘needs’ case where the applicant litigates unreasonably resulting in the costs incurred by each party becoming disproportionate to the award made by the Court. Where an order for costs is made at an interim stage the Court will not usually allow any resulting liability to be reckoned as a debt in the computation of the assets.”

Settlement Offers:

The direction encourages parties to negotiate reasonably and responsibly in relation to offers of settlement. These offers can have implications for costs, as a party who refuses a reasonable offer and then does not achieve a better outcome in court might be ordered to pay the other party’s costs from the time the offer was rejected.

The case OG v AG [2020] EWFC 52 offers valuable insights into financial remedy proceedings under English family law, emphasising the importance of reasonable negotiations and the repercussions of failing to do so.

Key aspects of this case revolve around the conduct of the parties, particularly in relation to their financial disclosures and negotiations. The husband was found to have behaved dishonestly by concealing assets and setting up a competing business using confidential information from the jointly-owned UK company. His actions included the sale of properties in Dubai and funnelling funds into a new European business. This led to a complex legal battle involving private investigators to trace his activities.

The wife, although generally more compliant, was also criticised for some non-disclosure of bank accounts early in the proceedings, which was deemed minor compared to the husband’s actions but still impacted her costs award.

The court ultimately emphasised the need for open and reasonable negotiations once the financial landscape became clear, noting that both parties had obligations under the revised paragraph 4.4 of Practice Direction 28A of the Family Procedure Rules.

How can ARC Costs Assist?

We regularly assist legal professionals in a wide array of costs matters and disputes, and as independent experts we can assist either Receiving or Paying parties.

If you are currently involved in family law costs proceedings, one of our experts will be able to provide expert legal advice on costs law. Our team also specialise in the production of costing instruments, such as Form H and Bills of Costs.

Please contact us on 01204 397302 or via email at info@arccosts.co.uk to find out more.