The New Ancillary Relief Costs Regime: A Special Bulletin

New costs rules in ancillary relief proceedings came into operation on 3 April 2006 by virtue of the Family Proceedings (Amendment) Rules 2006. The main components of the rules are as follows:-

• A new FPR 1991, r 2.71 is added to the existing rules which provides that the general rule in ancillary relief proceedings shall be that there be no order as to costs;
• A costs order may be made because of a party’s ‘conduct’, as defined by the rules;
• Only open offers to settle are to be admissible in the proceedings (save at a FDR); and in consequence the rules (FPR 1991, rr 2.69, 2.69B and 2.69D) which defined Calderbank correspondence and the factors for exercise of the court’s discretion on costs are revoked;
• CPR 1998, r 44.3(1)-(5), are disapplied; but the remainder of r 44.3 and Part 44 apply to ancillary relief proceedings;
• A new and more extensive Form H is prescribed.

In this Special Bulletin the author examines the context underpinning the scheme, the general rules relating to costs, the detail of the new rules and the meaning of ‘conduct’ within those rules. This is followed by a consideration of the extent to which ‘without prejudice’ privilege survives in ancillary relief proceedings and the practical implications for case management, including the power to seek interim financial provision orders (‘costs allowance’) to fund proceedings in the new costs climate.

The New Ancillary Relief Costs Regime also includes the text of all relevant rules, practice directions and forms.