By Alison Finch – Special Counsel
Usually, parties to family law proceedings are required to pay their own legal costs.
In some circumstances, the Federal Circuit and Family Court may order one party to pay some or, more rarely, all of the legal costs of the other.
The purpose of Cost orders in family law proceedings is to compensate the person who is awarded costs, not to punish the person required to pay costs.
Changes to the laws about family law costs orders will apply to court cases first filed from 10 June 2025 and existing court cases that are not finalised before 10 June 2025.
The changes clarify some of the laws regarding family law costs orders and make them more accessible by incorporating them in one place.
Changes to family law costs orders from 10 June 2025
The Family Law Amendment Act (2004)(Cth) (Amendment Act) replaces some of the existing costs provisions in the Family Law Act 1975 (Cth) (Family Law Act). The new costs provisions help set out when and how the Court can make a cost order.
- The following provisions were only found in the Federal Circuit and Family Court of Australia (Family Law) Rules 2021. They will now be included in the Family Law Act:
- The practicalities of how and when to make an application for costs.
- What type of costs can be ordered. For example:
- Costs of a specific amount.
- Costs to be assessed on a certain basis (party/party costs, solicitor/client costs, or indemnity costs).
- Costs calculated on a particular basis.
- The fundamental factors that apply when the Court considers whether to make a costs order in family law matters are unchanged:
- The financial circumstances of each party.
- Whether any party receives legal aid, and the terms of their grant of assistance.
- The conduct of the parties to the proceedings.
- Whether proceedings were necessitated by the failure of a party to comply with previous orders of the Court.
- Whether any party has been wholly unsuccessful in the proceeding.
- Any written offers of settlement in the proceedings.
- Any other matters the Court considers relevant.
Changes to clarify the law relating to costs
The Amendment Act includes an additional provision to clarify the law regarding costs.
Section 114(UB)(3)(e) requires the Court to consider whether or not a party has been ‘wholly unsuccessful’ in the proceedings. Section 114UB (7) makes it clear that the Court may make a costs order in favour of, or against, a party regardless of the degree to which the party has been successful in the proceedings.
The Independent Children Lawyer’s costs
An Independent Children’s Lawyer (ICL) is often appointed in complex parenting proceedings. The ICL’s work is funded by government funds administered through Legal Aid schemes.
In cases where an Independent Children’s Lawyer is appointed, the Court may make a cost order and decide what proportion of the ICL’s costs each party must pay.
Pursuant to section 114UC (4), when the Court considers whether a party should contribute to the ICL’s costs, it must disregard the fact that the ICL is funded by the government.
The Court is required to consider each party’s degree of financial hardship and must not make an order that a party contribute to an ICL’s costs, where hardship exists.
Previous cases have emphasised that ICL’s are appointed in complex parenting matters where ordering a party to pay a cost order to the ICL may cause financial hardship indirectly to the child.[1]
Where family violence is an issue, a party is not allowed to personally cross-examine the other party. So, if one party is self-represented, the Commonwealth Cross-examination scheme (Scheme) funds the self-represented person to engage a lawyer solely to cross-examine the other party.
The Amendment Act has followed previous case law on the position[2] and clarified that despite the Commonwealth Cros-examination Scheme being administered by Legal Aid, the funding a party receives from that Scheme is not considered to be Legal Aid funding. This is because the Scheme is mandatory and not means-tested.
Therefore, clients who receive assistance from the Commonwealth Cross-examination scheme may be ordered to pay the cost of the ICL, unless they would suffer financial hardship.
Costs where a child welfare officer intervenes under section 91B of the Family Law Act
Section 114UC (5) continues the current law that where a child welfare officer intervenes in family law proceedings and the officer acts in good faith in the proceedings, the Court must not make an order for costs against them personally, or against the agency they represent. The Department of Families, Fairness and Housing in Victoria, and equivalent organisations in other states.
Costs against litigation guardians
When a party does not have capacity to instruct a lawyer or adequately conduct proceedings due to mental impairment or disability, a litigation guardian can be appointed to make decisions on their behalf.
Section 114UC(6) provides that the Court must not make a costs order against the litigation guardian unless:
One or more acts or omissions of the litigation guardian are:
- Unreasonable; or
- Have delayed the proceedings unreasonably.
The changes to laws relating to costs orders is one of several changes to the Family Law Act which will come into effect on 10 June 2025. For more information regarding the other changes, please visit this article.
If you have a family law issue, it is important to get advice as early as possible. Do not wait until you are in Court. Please call us on (03) 8672 5222 to arrange an appointment with one of our experienced lawyers.
[1] Zebro & Zebro [2020] FamCA 307 (30 April 2020);
[2] Carano & Carano (No 3) [2024] FedCFamC2F 833 (2 July 2024)
