Divorce and the “costs” of Financial Disputes

Divorce and the “costs” of Financial Disputes

About Honor Desmond-TetlowHonor Desmond-Tetlow

Ms. Desmond-Tetlow is a senior associate in the firm’s litigation group and advises on all areas of matrimonial and family law and in general civil litigation. She is also a trained mediator and collaborative law practitioner.

Honor Desmond-Tetlow’s full profile on mjm.bm.

A January 2019 reported decision of the Supreme Court (F v F) provides a more forceful argument than ever for the resolution and settlement of all financial matrimonial issues.

Matrimonial lawyers will be aware that the vast majority of financial disputes do not end up before the Court and that usually common sense or, at times, exhaustion prevails. However, when a case does go to Court, it had been the belief of clients and practitioners alike (prior to this recent decision), that “costs would follow the event”. This term, used broadly in all civil matters, simply means that the “losing” party would be obliged to pay the “winning” party’s costs” i.e. a portion of their legal fees.

In the UK, the Family Procedure Rules of 2010 changed this expectation by providing that in matrimonial cases, the court would be likely to “make no order as to costs”. In straightforward terms, each party would be responsible for their own legal fees.

Now, our Court has taken the view that a 2006 amendment made to the Bermuda Supreme Court Rules has had the same effect in this jurisdiction.  Therefore, we can expect to see more clients being solely responsible for all of their own legal fees in disputed cases.

This does not of course mean that unreasonable or dishonest conduct in litigation such as failure to disclose information, lengthy delays, not responding to settlement offers or general shiftiness will be excused or ignored. The court maintains a discretion. It does, however, mean that clients must make very serious efforts to reach an agreement on finances in all matrimonial cases or run the risk of paying the price.    Quite literally.