Could parties in family proceedings face financial penalties?

Could parties in family proceedings face financial penalties?

Few would dispute that the family courts are overstretched, and that this is leading to lengthy delays in obtaining dates for court hearings. Both the legal profession and litigants in person would welcome changes that address this. 

So, it is good news that the justice secretary, Dominic Raab, is looking at ways to address the issues and is considering incentives to encourage parents to take the mediation route. But are financial penalties the answer?  An alternative would be to consider providing the court system with more resources and we should not always be looking at other ways of solving a problem which is being caused or exacerbated by lack of or reduction in resources.

How can mediation help?

When attendance at a mediation information assessment meeting (MIAM) became obligatory before being a court application may be issued (unless there are certain exceptional circumstances), the aim was that this would lead to many couples resolving their issues in mediation. This has not happened, which is not a surprise to most family lawyers. Such thinking missed the vital point that family lawyers were already trying very hard to resolve issues without issuing court proceedings, particularly those related to children, including fully considering the opportunity to mediate. Court proceedings were, and are, usually a last resort.

If a couple has the benefit of legal advice, this will help them understand if what they are seeking is unlikely be the outcome and that negotiations will need to take place. Without that advice, one or the other parent will issue a court application and it will come before a judge within the court system. There will often need to be additional hearings, as litigants in person may not have compiled all the relevant paperwork, and hearings will take significantly longer as there is unlikely to have been a narrowing of the issues without the involvement of lawyers.

If parents are required to attend mediation to try and reach an agreement and face penalties if they don’t, that will completely remove the concept that mediation is voluntary and a process for those who genuinely want to try and reach an agreement. As a solicitor, and a mediator, I have seen couples who just see their attendance at a MIAM as a hoop they have to jump through before being able to issue court proceedings. I am not convinced that having to attend several further mediation meetings will change that outcome.

What would be considered ‘vexatious’?

We are told that parents who bring vexatious claims may face financial penalties, but currently it is rare for a costs order to be made in proceedings under the Children Act 1989 (ChA 1989) and it is very difficult for a decision to be made that one parent should not have brought proceedings, or should have conceded prior to proceedings being issued, when they have concerns about the welfare of their children. An example might be where a parent is overly anxious and the outcome adjudicated by the court is for both parents to co-parent. Will the court then penalise the overanxious parent with financial penalties? How would the court determine that someone has brought a ‘vexatious claim’ when it concerns children? The court would effectively have to say that there was no merit whatsoever in one parent’s claims. We do not have statistics, but in my view there are few cases where this applies.

It is without doubt better for children if their parents can resolve matters without putting their children in the centre of a legal battle, but parents do need to be able to have legal advice. This could be within the court system, with parents having access to some advice at court from a different lawyer to the other parent when they attend for the first time. This has been tried with parents meeting with a Cafcass officer at court and on occasions this did help resolve issues right at the beginning. Why is this resource not fully available now?  Was this decision based on available funding?

Costs

Historically the main impact on litigants is the risk of being ordered to pay money in the form of the other party’s costs. What has now been suggested is some sort of financial penalty. If both litigants are in person, they will not have legal costs which currently form the basis of such claims and it would need to be very clear as to what steps taken, or not taken, could lead to a financial penalty.

In financial remedy cases, the courts used to make costs orders, particularly if the final outcome was less than one party had offered pre-trial by way of financial settlement. This is no longer the case. A difficulty was that a judge at final hearing (who would be unaware of these without prejudice offers) might give a judgment which was balanced and provided, say, for the weaker financial party’s housing needs. This outcome could effectively be undermined if a costs application followed in which that weaker party had to pay a large sum of costs to the other. Costs orders may still be made because of ‘litigation conduct’, where a party has behaved within the proceedings in such a way so as to increase the other parties costs, and now costs orders may also be made if one party has declined to negotiate and put forward a proposal.  

What does this mean for business interests in financial cases? The value of a business is often disputed and within the court proceedings forensic valuations can be obtained. In this arena, mediation could really help, but only if both parties were willing to mediate. A disagreement as to the value of a business could arise where a party insured the business for a certain value or exaggerated its value in a social setting. Such figures might remain fixed in the mind of the other party but could be explored in mediation. An experienced mediator could assist in suggesting ways in which the parties could obtain more initial information (for example, from the company accountant) which might facilitate agreement.  

In ChA 1989 cases, one option might be to require the parents to put forward their proposals at various stages along the way and for the court to take those proposals into account in deciding if there should be any financial penalty. But how would the court approach a scenario where say one parent proposed four nights a fortnight and the other parent sought six nights a fortnight? If the outcome was four nights, should the six-night parent have to face a financial penalty? Should that parent concede even if they genuinely believe six nights is best for the children for fear of financial penalty?                 

In any event any such measures still leave the issues in the court arena. Even if there were very clear guidance on penalties, mediators could explain that to both parents, but would not be able to advise either one to concede or press forward.  

Conclusion

Incentives and penalties sound a good idea, but the history in family proceedings does not indicate good results. While I welcome Dominic Raab’s commissioning of proposals as to how the number of family cases in the court process may be reduced, great care needs to be taken that this is not going to be a way of justifying there being insufficient court resources or reducing those resources further. 

Marilyn Bell is a partner and head of the family law team at SA Law

 


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Marilyn Bell is a partner and head of the family team at SA Law