Family Law Costs: “Divided” Success is not “Equal” Success
Readers may know that one element of the courts’ role is to allocate how the costs incurred in Family Law proceedings are to be divided up between the litigants. The presumptive rule, traditionally stated, is that “the costs should follow the event”, which simply means that a litigant who is wholly successful in the proceedings is entitled to have his or her costs paid by the other, unsuccessful litigant.
That’s the most straightforward scenario. But it gets more complicated when the parties have “divided success” – meaning there were numerous legal issues raised, and the ultimate court order reflected partial success for each of them. In other words, each party was victorious on some of the issues, but not on others.
The true meaning of “divided success” was the focal point of the recent decision in Lazare v. Heitner. The former couple had asked the court to review a prior spousal support order in the wife’s favour, which necessitated considering several issues including: 1) whether her support should continue at all; 2) how long it should last; 3) at what dollar amount should the support be set; and 4) what income-level be attributed to the wife.
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The court outlined the guiding costs rules for “divided success” cases, as follows:
If success in a step in a case is divided, the court may apportion costs as appropriate. Divided success is not equal success. It requires a comparative analysis. Most family cases have multiple issues and not all are equally as important, time-consuming or expensive to determine. When there are a number of issues before the court, only the dominant issue may be the one that attracts an award of costs. When deciding what that issue was, the court must also consider the parties’ respective Offers to Settle.
The problem was that by the time the matter got to trial, the dominant issue had changed from the one that had been the focal-point during negotiations and the exchange of settlement offers. During settlement, it was whether the wife’s spousal support should be terminated; at trial, the other issues took center-stage. This differential focus over time managed to complicate the costs-allocation exercise. As the court put it:
Therein lies the dilemma of litigating off a different menu than one negotiates.
To facilitate the analysis, both spouses had prepared charts; some compared the results at trial to their respective positions beforehand; while others compared trial results to their settlement offers. But the court observed that the key purpose of costs awards was to: 1) partly indemnify successful litigants on the costs of litigation; 2) encourage settlement; and 3) discourage inappropriate behavior. That being the case, the comparison had to be between what each party sought to gain by litigating, versus what they actually achieved at trial. As the court put it:
To do otherwise is to encourage all in, or all out litigation; or in other words, the all too familiar “accept my terms or I’ll fight you on everything.”
In the end, the court dissected the various pre-hearing positions of each party, assessed whether these were reasonable in all the circumstances, and awarded the husband most – but not all – of the costs he asked for, in light of the particular circumstances.
Noting that “divided success is largely a discretionary exercise,” the court added:
Assessing costs is “not simply a mechanical exercise,” and it is well understood that courts do not necessarily reimburse a litigant for every dollar spent on legal fees. Ultimately, the court’s responsibility is to make a costs award which is proportional, fair and reasonable in all the circumstances.
For the full text of the decision, see:
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