Re B (Children)

In family proceedings, an order for indemnity costs is wholly exceptional and requires careful thought and justification. A costs order founded materially on an erroneous factual finding, particularly where the court overlooked a litigant’s timely written participation, cannot stand. Where the record permits, the appellate court may exercise the costs discretion afresh and substitute the proper order rather than remit the issue. Conduct must be assessed in the context of the family circumstances, including changes in circumstances and intervening developments in the litigant’s life.

The mother had relocated to Spain, withdrawn instructions from her solicitors and failed to attend a hearing concerning agreed arrangements for contact and periodical payments. She had sent the Principal Registry a medical certificate and written representations, but those documents were not placed before His Honour Judge Bradbury. On 5 December 2005, the judge made orders reflecting the parties’ agreement and ordered the mother to pay indemnity costs exceeding £24,000, relying in part on the finding that she had not participated. She sought permission to appeal. The central issues were whether the costs order could stand and whether the Court of Appeal should remit the matter or exercise the discretion itself.

1. Permission granted and appeal allowed. The costs orders made below were set aside. The judge had proceeded on the erroneous assumption that the mother had not participated in the proceedings, although she had sent a timely communication to the court containing a medical certificate and written representations. That error was material to the exercise of the broad costs discretion and gave the order an erroneous foundation (Thorpe LJ, paras [7]–[9]).
2. An order for indemnity costs in family proceedings is a wholly exceptional order. It requires careful consideration and clear justification. The mother’s conduct could not properly be condemned as wholly unreasonable when the relevant communication was available, or had been clearly flagged in correspondence before the judge (Wall LJ, paras [12]–[13]).
3. The Court of Appeal was entitled to exercise the costs discretion afresh rather than remit the matter. Having regard to the unusual nature of costs orders in Children Act proceedings, and to the changes in circumstances and intervening developments in the mother’s life, the proper order was no order as to costs before the judge. Each parent was to bear their own costs of the appeal as well (Thorpe LJ, paras [9]–[10]; Wall LJ, para [14]).
4. Thorpe LJ proposed that the parties should approach the remaining contact issues with goodwill and practical sense, but no appeal order was required concerning contact. Moses LJ agreed with both judgments (para [15]).

• Court of Appeal (Civil Division): Permission granted and appeal allowed. The indemnity costs orders made below were set aside, and the Court of Appeal substituted no order as to costs before the judge and no order as to costs of the appeal.
• High Court of Justice, Principal Registry of the Family Division: On 5 December 2005, His Honour Judge Bradbury made orders reflecting the parties’ arrangements for contact and periodical payments and ordered the mother to pay indemnity costs exceeding £24,000.