Norris & Anor v Haskins & Anor

The two cases before this Court raise similar issues of general importance, that is to say, the correct approach of the court to the treatment of costs in family financial disputes. One feature relevant to both the cases is that they come within the bracket sometimes described as big money cases. The main issue raised is the proper approach of the court to the making of confidential offers and counter-offers by the parties which are then disclosed to the judge after he/she has made an award in an ancillary relief application, otherwise called ‘the Calderbank offers’.

On 11^th April 2003 Mr Norris sought permission to appeal and a long extension of time from the order of Bennett J made on the 28^th November 2002. On that day Bennett J ordered Mr Norris to pay 80% of the costs of Mrs Norris. Thorpe LJ directed an oral hearing on notice with the appeal to follow if permission and extension of time were granted. On 3^rd June 2003 on the application for permission to appeal by Mr Haskins, made within the required time, Thorpe LJ directed an oral hearing on notice with appeal to follow if permission was granted. In that case Mr Bruce Blair QC, sitting as a deputy High Court judge, ordered Mr Haskins to pay 85% of the costs of Mrs Haskins.

The Calderbank doctrine is by now well-known. The case from which it takes its name was decided by this court in 1975, and whilst the views in that case may have been obiter, they were soon adopted as the established procedure in matrimonial financial claims (see McDonnell [1977] 1 WLR 34).

In Cutts v Head [1984] Ch 290, this court reviewed the Calderbank procedures, and decided that they should be applied more generally to civil litigation. Two years later the Calderbank principle was formally written into the Rules of the Supreme Court by the introduction of Order 22, rule 14 and Order 62, rule 9.

Following the civil procedure reforms and the introduction of the Civil Procedure Rules, RSC Order 62 and CCR Order 38 were replaced in relation to family proceedings by Parts 43, 44, 47 and 48 (with some exceptions) of the CPR: Family Proceedings (Miscellaneous Amendments) Rules 1999 (SI 1999/1012).

The relevant part of CPR Part 44 reads as follows

The ‘general rule’ at sub-rule (2)(a) is also disapplied in relation to family proceedings by the Family Proceedings (Miscellaneous Amendments) Rules 1999, r 4(1)(b).

In Butcher v Wolfe and Another [1999] 2FCR 165, this Court reviewed the working of the Calderbank procedure. Although the decision was given before the introduction of the Civil Procedure Rules, Mummery LJ in his judgment helpfully set out at pages 170-171 nine propositions, which included under proposition (6)

The issue in that case was the reasonableness or otherwise of the refusal to accept the offer and the question of a counter-offer did not arise. The principle of broad overall judicial discretion is underlined in CPR Part 44.

We have been told by counsel in the two appeals that the approach to the award of costs in ancillary relief cases, where Calderbank offers have been made, has been dominated by the decision of this court in Gojkovic v Gojkovic (No 2) [1992] Fam 54 and less attention, it appears, has been paid to the Family Proceedings Rules as amended by SI 1999/3491 and the judicial exercise of discretion provided by rules 2.69B and 2.69D (see below).

It is of some importance to know the facts of Gojkovic v Gojkovic (No 1) [1992] Fam 40 and the principles governing the orders for financial relief for wives in 'big money cases' in 1991. The husband in that case had not made full and frank disclosure of his assets which amounted to £4 million not £1 million to which he originally deposed. The final Calderbank offer of £600,000 was made on the 17th January, only the day before the substantive hearing. On the same day the offer was rejected and the husband was informed that the wife was asking for £1 million. The judge awarded the wife a lump sum of £1 million. This was, for those days, a very high award to a wife. The appeal against the award was dismissed by this Court.

The judge made no order as to costs after the 6^th January, the date when the wife's solicitors had rejected an earlier, lower, offer by the husband and had suggested a meeting to try to settle the matter. The judge held that from the 6^th January, both sides had acted reasonably. The wife appealed. A major issue in Gojkovic (No 2) was the absence of a counter-offer by the wife. In my judgment I set out the general principles then applicable to High Court civil proceedings. I said at page 271

I then set out the practice in the Rules of the Supreme Court and said at 272

The position of the parties in Gojkovic (No 2) is, I assume, fairly unusual in that the husband's inadequate offer was made very late and the wife genuinely had no opportunity to make a counter-offer. If that situation is remembered, and my emphasis upon the importance of negotiation by both parties and real efforts by both parties to settle the case, my judgment may be read somewhat differently. My observation that there was no difference in principle between the failure of the payer in family cases to meet the sum awarded by the court and the failure to reach the payment into court in civil proceedings is to be seen as applicable to the Gojkovic (No 2) situation of only one offer and no opportunity for a counter-offer. I am somewhat dismayed to learn that it may have been taken far more broadly by the legal advisers, thereby ignoring the significant importance of the need for a counter-offer and for genuine negotiation by both parties. As I said, in the passage set out above, the starting point is the offer by the paying party but the absence of a counter-offer may well be reflected in costs.

The decision in Gojkovic (No 2) was followed by the introduction of the Calderbank procedure into the Family Proceedings Rules 1991, with a new rule 2.69 coming into effect on 5^th October 1992. Rule 2.69 was wholly rewritten by the Family Proceedings (Amendment No. 2) Rules 1999 (SI 1999/3491). The relevant provisions of rule 2.69, as amended, now read as follows:

Whatever may have been understood by the profession from my judgment in Gojkovic (No 2) it has been overtaken by and has to be read in the light of the 1991 Rules as amended. Rule 2.69C, which attempted to deal with the situation where both offers and counter-offers have been made, was originally inserted along with the above-cited rules. That rule was subsequently revoked by the Family Proceedings (Amendment) Rules 2003 (SI 2003/184) with effect from February this year, and its demise has left rule 2.69B appearing to deal with an offer and not with offers.

It appears that in some cases where rule 2.69B has been considered by the court or by Counsel, the only offer considered has been that of the payer. This construction of rule 2.69B is at the heart of the criticism made by Mr Mostyn QC, sitting as a Deputy High Court judge, in GW v RW [2003] EWHC 611 (Fam); [2003] 2 FCR 289. He said at paragraph 83

Mr Mostyn in his judgment then went on to set out his objections in principle to the general rule that costs should follow the event.

At paragraphs 87 and 88, Mr Mostyn noted further objections. The existing procedures discriminate, he said, against husbands. Further, it forces parties to engage in a form of “spread betting” by requiring them to guess the outcome of the case and take a position accordingly, without making an award for those who might guess better than others.

Having set out the objections to the existing procedures, he concluded

I recognise the difficulties which arise and which have been so trenchantly expressed by Mr Mostyn as set out above. The removal of rule 2.69C increases the awkwardness of the language of rule 2.69B and has presented problems. It does not, however, make that rule incomprehensible. In any event it is not for judges to deem a rule or a section of an Act of Parliament incomprehensible or unworkable. If passed by Parliament, whether it be primary or secondary legislation, it is the duty of the court to do its best to make sense of it. Judges do not have the right to dump the awkward passage wholesale. In my judgment, therefore, Mr Mostyn QC in his judgment in GW v RW (above) was wrong to treat the rule as incomprehensible and to substitute his own approach by making a decision which was not based on the existing rules.

Mr Le Grice QC, for Mr Haskins, made submissions to the effect that since the decisions in White v White [2001] 1 AC 596 and Lambert v Lambert [2002] EWCA Civ 1685, the traditional approach to the award of costs required to be changed in order to do justice between the parties. He referred to the court’s move away from the concept of ‘reasonable requirements’ in the division of family assets, a concept which Mr Mostyn in GW v RW (above) said, at paragraph 84, had now been “comprehensively condemned as discriminatory”. It was submitted that in light of the radical change in approach to the division of marital assets post-White, and in particular the ‘yardstick of equality’ approach, the proper starting point should now be that there should be no order as to costs. This was the approach of Mr Mostyn in GW v RW. It was also the approach of the Costs Sub-Committee of the President’s Committee on Ancillary Relief in its Report (see below), which said at paragraph 4(b)

The court is, nonetheless, obliged to apply the rules unless or until they are amended. Rule 2.69, as amended, provides the current code on Calderbank offers to be followed until any further rule changes are made. Sub-rules 2.69(1) and (2) give statutory authority to the Calderbank practice in ancillary relief proceedings. The starting point in rule 2.69B is whether the offerer offers more or less than the court order. If less, he/she will pay the costs incurred after 28 days after the offer was made, unless the court considers it would be unjust to do so.

Rule 2.69D and its effect on rule 2.69B merit closer consideration. In rule 2.69D the court must take into account all the circumstances of the case including the list set out therein. This includes, in (a), the terms of any offers. That must include counter-offers. It also requires, in (e), the court to take into account the respective means of the parties. In my view, (e) enables the court to look at the whole position of the parties after the order has been made and see whether costs may fall disproportionately on one party rather than the other. It may enable a judge or district judge to mitigate, to some extent, the uncomfortable consequences of a Calderbank situation in a case where there is some but not a substantial amount of property and/or money to divide and costs will have to be paid from the available capital. The judge, in such a case, may make an order, often just enough to buy a suitable property for the wife, and then find that effect of the Calderbank offers may totally destabilise his order. Equally, of course, the Calderbank process must have teeth which can bite. Both parties are under an obligation to engage in genuine negotiation with the other side, otherwise one party may have to be penalised in costs. In medium asset cases I do not underestimate the difficulties. Rule 2.69D does however give the court a greater latitude in making costs orders than may so far have been widely recognised.

In my judgment, therefore, rules 2.69B and 2.69D can be managed and, where the court considers it unjust to apply rule 2.69B, it can make a different costs order to reflect the justice of the case. Mr Pointer QC, in his thoughtful and comprehensive skeleton argument, sets out in a bar chart a series of permutations arising from a court order to a wife of £1 million. I take one hypothetical situation. If a husband offers £800,000 and the wife asks for £1,200,000, neither has achieved the figure of the order and each is wide of the mark by the same amount. In broadly comparable situations, not tied to exact percentages since each case must be decided on its own facts, the result might be termed, as Mr Cusworth for Mr Norris suggested, a draw. In my view, in some offer and counter-offer cases, the proper approach might well be, under the present procedure, to make no order as to costs and leave each party to pay his/her own costs.

A complication in sub-rule 2.69B(2) is that the order for costs dates from 28 days after the (relevant) offer was made. Neither judge in the two cases before us had his attention drawn to that part of the sub-rule. It seems to me, however, that the costs prior to the relevant offer are to be dealt with in the exercise of the court's discretion.

The current procedure on costs in family financial disputes is regulated by the two statutory codes, the CPR and the FPR, each of which gives the judge or district judge a broad judicial discretion. I have had the opportunity of reading the judgment of Thorpe LJ in this case, and would respectfully agree with paragraph 61 of his judgment in which he says that the harmonious integration of the separate codes is to be best achieved by treating CPR 44.3 as covering all cases. The exercise which the court undertakes under CPR 44.3(4) requires consideration of all the circumstances, including the parties’ respective conduct and success and, under subsection (4)(c), any offers made. In so far as the court is looking at a Calderbank type case, the exercise under subsection (4)(c) is better dealt with under the fuller provisions to be found in FPR rules 2.69, 2.69B and 2.69D. Reading the two sets of rules together, the court has a general and wide discretion to depart from the starting point of 'winner takes all'.

The difficulties which undoubtedly arise from rule 2.69, set out by Mr Mostyn with clarity in his judgment in GW v RW, do now urgently require a rethink and it is time for further amendments to the rules governing awards of costs in ancillary relief cases. The present rules may affect disproportionately the payers in big money cases. The effect of costs is however to be felt across all ancillary relief claims. Although I have criticised Mr Mostyn for the cavalier way in which he dismissed the Family Proceedings Rules, his approach to the reconsideration of costs requires careful thought, and I agree with the overall direction of his judgment for the future.

The Costs Sub-Committee of the President's Committee on Ancillary Relief, to which I refer above, under the chairmanship of Bodey J, recently reported to the Main Committee. We have been provided with a copy of the Report. It makes a series of excellent suggestions, many of a radical nature, which would meet the current requirements in relation to costs in family financial disputes. I agree with them and endorse them. I hope time may be found to bring them into effect by amendments to the Family Proceedings Rules in the near future.

My view that the present approach of the courts in family financial matters needs reconsideration is reinforced by a letter I received from the Senior Costs Judge on the 27^th January 2003 in which he said

I am extremely grateful to the Senior Costs Judge for his timely warning as to the adverse effect of the costs assessment process on family financial litigation. His sensible proposals require urgent consideration and provide a spur to taking action to introduce a radical approach to costs in all ancillary relief or similar disputes.

I turn now to the individual cases before this Court, and shall deal first with the issues which arise in the Haskins case in which we give permission to appeal.

The wife’s application for ancillary relief is based on a 23 year marriage which endured from 1973 until 1996, the year after their separation. There are three children of the marriage, two boys of 23 and 20 and a girl of 19. One son has learning difficulties and both sons have health problems. The husband is 54 and the wife is 51. The wife had some inherited assets of her own. The husband runs a family nurseryman business started by his great grandfather in 1882. The arrangements for the family business, set out with clarity and in detail by the deputy High Court judge were extremely complicated. A separate business, selling arts and crafts and hobby materials, was set up. There were very considerable borrowings from the bank and cross guarantees.

The husband had set up a family trust for the benefit of the 3 children and transferred a considerable number of shares in his companies to the trust. He was one of the trustees and resigned from the trust as a result of the divorce proceedings. Any arrangements which affected the shares of his companies required the approval of the trustees who were acting at arm’s length from the husband. The husband also had a valuable pension fund.

The ancillary relief applications were litigated over a period of about 4 to 5 years. As a result of the problems of the two sons, the wife had been reluctant to move from the former matrimonial home which the parties eventually agreed should be transferred to her and should be sold in due course. One important factor was the apparent lack of liquidity with which to provide a fair proportion of the family assets to the wife. There was complicated and disputed evidence of valuations of the relevant shareholdings and as to liquidity.

The detailed order of the deputy High Court judge on the 11^th March 2003, inter alia, awarded the wife a lump sum of £1,230,000 to be paid in instalments and transferred a number of shares in the Hobbycraft company upon which no value was set. It is not necessary to set out other parts of the order.

After his decision Mr Blair QC was shown the lengthy Calderbank correspondence. He gave a careful but extempore judgment on the issue of costs in which he said at paragraph 3

Although Mr Blair QC appeared in that paragraph to be concentrating entirely on the offers made by the husband, as one reads further it is clear that, as he said at the beginning of the next paragraph

He considered the stages of the offers made by the husband and was critical of the failure of the husband to find a way round the liquidity problem until a late stage. The deputy High Court judge held that a core feature of the saga was the failure to pursue the potential unlocking of liquidity as he should have done. That failure and the inadequacy of all the earlier offers led him to the conclusion that, in broad principle, the husband should pay the wife’s costs. He then considered the factors adverse to the wife and concluded that

He made findings of fact as to the respective positions of the parties and their relative culpability. He looked at the whole of the circumstances and the wife’s stance towards the husband. Mr Blair’s conclusion was

Mr Le Grice QC, for Mr Haskins, submitted that the deputy High Court judge misdirected himself in failing to follow the approach subsequently adopted by Mr Mostyn in GW v RW and Mr Mostyn’s consideration of the cases since White v White. He pointed out that the wife had failed to enter into negotiations until a late stage and that the husband was unable to make an effective offer until the problem over liquidity had been resolved. He accepted however that the wife had, shortly before the resumed hearing in November, made a final counter-offer which was extremely close to the final lump sum order.

Looking broadly at the justice of the case and the careful approach of the deputy High Court judge, in my judgment he did not fail to apply the relevant rules nor err in principle on the assessment of costs. He exercised his discretion and made a careful decision on costs. There are, in my view, no grounds upon which this Court would be entitled to interfere with that exercise of discretion nor to substitute our views for those of the trial judge in the circumstances of this case.

I would dismiss Mr Haskins’ appeal.

The couple met when he was 30 and she was 19. They married in 1975 and parted in 1998, also a marriage of 23 years. There is one son aged 20. The decree absolute was granted in April 2002. The husband is living with a partner by whom he has two young children. The assets of the wife were roughly £3.6+ million. The assets of the husband were about £3.3 million without adding his pension fund, or £4.1million including his pension fund.

The judge found that there was a difference between the assets of the parties of about £720,000 and awarded the wife a lump sum of £360,000. He was then shown the Calderbank correspondence between the solicitors for the parties.

Mr Scott QC, then appearing on behalf of Mrs Norris, referred the judge to FPR rules 2.69B, 2.69C (then in force) and 2.69D and made the simple submission that the order of the judge had comfortably beaten the Calderbank offer. Mr Mostyn QC for the husband made submissions which set out in summary the main points in his later judgment in GWv RW. The judge said

The position of Mr Norris is entirely different from that of Mr Haskins. The substantive hearing was completed on the 28^th November 2002 and the costs order immediately followed the judgment. Mr Norris did not ask Bennett J for permission to appeal. He had 14 days from judgment within which to apply to the Court of Appeal for permission to appeal, see CPR 52.4(2)(b). His application for permission to appeal was made on the 2^ndApril 2003, some four months after the hearing and over three months out of time. It was therefore necessary for him to apply for an extension of time in accordance with CPR 52.6. On applications for extension of time, this Court must take into account CPR 3.9 which sets out the factors to be taken into account in considering whether to grant relief from sanctions. Those include whether the application for relief was made promptly, to which the answer is no; whether the failure to comply was intentional – yes; whether there is a good explanation for the failure – I shall turn to that in a moment; and the effect on each party - in this case a great deal of money is involved in the costs which have mounted over the hearings. The effect upon the former wife as well as the former husband would be very considerable indeed.

Generally the interests of the administration of justice are best met by applying the overriding objective, by hearing cases expeditiously and fairly and by bringing about an end to litigation. Mr Cusworth, in carefully argued submissions to us, pointed out that the effect of the mounting costs on both sides would be to generate continuing litigation over the assessment of the parties’ costs before the costs judge. Consequently he argued, it was not possible to draw a line under the proceedings and bring them to a close. The difficulty with that submission is that, if the judge misdirected himself on the issue of costs, the opportunity was there to challenge it at the hearing or to seek permission to appeal shortly thereafter. Mr Mostyn, leading Mr Cusworth, argued shortly to Bennett J the points he later elaborated in his judgment in GW v RW. It was not suggested that Mr Norris received bad advice from his team of lawyers, among the most experienced in the country, and it strains credulity to imagine that Mr Norris did not seek or receive advice as to whether to take the issue of costs further.

The main reason, and indeed the only reason, for the delay in excess of 3 months in filing the application was put as attractively as it could be by Mr Cusworth. But his advocacy could not disguise its lack of merit. Stated shortly, in November 2002, there had been no reported challenge to the traditional approach to costs orders in Calderbank cases as discerned from my judgment in Gojkovic (No 2). There was no basis, in the view of Mr Norris’ legal team, upon which to mount an application for permission to appeal and, presumably, Mr Norris did not wish to be a trailblazer. However, when Mr Mostyn, wearing his judicial hat, decided GW v RW in March 2003, from whose decision Mrs GW appealed, although the appeal was later withdrawn, there was then a peg upon which to hang an appeal by Mr Norris and the application was made for permission and for an extension of time. The flaw in the argument is however that the issue was the same in November 2002 as it was in April 2003. The issue was identified in November 2002. The decision not to appeal was clearly intentional in December when time for permission to appeal expired. There is no excuse for the late application other than the controversial decision in GW v RW.

The interests of the administration of justice require the Court not to be unjust to either spouse. To set aside the order for costs would have a considerable effect upon the wife. For the reasons I have set out above, the hurdles that require to be surmounted by the husband to demonstrate a greater injustice to him than to the wife are, in my view, insurmountable.

I would refuse the application by Mr Norris for permission to appeal and for an extension of time.

I have had the advantage of reading in draft the judgment of the President. I agree the results that she proposes and her reasons. I add a brief judgment of my own given the fact that over the course of more than a decade I have chaired what was the Lord Chancellor’s Ancillary Relief Advisory Group and what is now the President’s Ancillary Relief Working Group.

The early work of the group was conducted against the background of Family Proceedings Rule 2.69 which with effect from 5 October 1992 applied CCR Order 11 Rule 10 to ancillary relief proceedings. That was of course a specific provision in relation to Calderbank proposals and the more general field was governed by complex provisions in the Rules of the Supreme Court, the County Court Rules and Family Proceedings Costs Rules. In April 1997 rules to introduce the procedural innovations to be operated in specified courts (the pilot scheme) included provisions as to cost estimates and open offers.

On 26 April 1999 CPR 44.3 was applied to family proceedings with the exception of sub-rule (2) which was specifically disapplied. This innovation replaced earlier complexity and was broadly welcomed as a simplification. By this time the Ancillary Relief Working Group were collaborating with the Lord Chancellor’s Department in preparation for the extension of the pilot scheme throughout the jurisdiction. There was much discussion within the group as to how Rule 2.69 should be extended to codify best practice in negotiation through the medium of Calderbank correspondence. Ultimately the extension emerged as FPR 2.69A-E with effect from 5 June 2000.

This innovation was not well received and did not stand up to hard wear and tear. In preparation for a meeting of the group on 24 October 2001 Nicholas Mostyn QC submitted a detailed critique which can be summarised in this quotation:

At the meeting he suggested that the time had come to adopt an assumption that legal costs should lie where they fall throughout family proceedings.

At the next meeting of the working group on 24 April 2002 FPR 2.69A-E was further discussed and it was agreed that the Family Law Bar Association and the Solicitors Family Law Association representatives should work together on the developing problem.

This initiative was developed at the next meeting on 7 November 2002 by the creation of a sub-committee to look into the question of costs in ancillary relief proceedings generally and whether the assumption of no order which applied in Children Act proceedings should not be adopted in ancillary relief proceedings.

At the first meeting of the sub-committee under the chairmanship of Bodey J on 25 November 2002 a recommendation was advanced to the Lord Chancellor’s Department to delete 2.69C as an immediate measure, given that the majority of the criticism from practitioners and judges had focussed on the difficulty of construing and applying that rule. The recommendation was implemented by SI 2003 No 184 with effect from 24 February 2003. In the interim the President had received the very significant letter from the Senior Costs Judge alerting her to the unacceptable level of contention generated by the assessment of costs incurred in ancillary relief proceedings.

Mr Mostyn’s decision in GW v RW was made available on 18 March 2003 and considered at the second meeting of the sub-committee on 26 March. Their concluded recommendations were completed at the end of April and adopted at the meeting of PARAG on 14 May 2003. That is a brief overview of the work of the group in this area.

Whilst I am in complete agreement with the direction that Mr Mostyn sought to take in his costs judgment in the case of GW v RW I cannot agree his route. As a matter of principle the determination of any question of costs in ancillary relief proceedings must be governed by CPR 44.3 together with FPR 2.69 in its current form, namely 2.69, 2.69B and 2.69D. The harmonious integration of these separate codes is in my judgment best achieved by treating CPR 44.3 as covering all cases. If in a specific case no Calderbank offer has been written then the judge will apply CPR 44.3 without more. In a case in which a Calderbank offer or offers are relied upon then I consider that the judge should apply CPR 44.3 notionally inserting into the exercise FPR 2.69 in substitution for CPR 44.3(4)(c).

Thus I do not consider that Mr Mostyn was right to reject the Rules as being incomprehensible or unworkable and develop from a clean sheet a new code. The courts must continue to determine costs applications in accordance with the Rules. However within the broad discretion that the Rules confer the judge is of course entitled to give due weight to the general evolution signalled by Mr Mostyn’s decision in GW v RW and the report of the sub-committee.

What then is the rationale for change? First, as these appeals illustrate, paragraphs 2.69(B) and (D) are difficult to construe and apply to any case in which there has been a progressive Calderbank negotiation with the exchange of several offers and several counter offers. Those rules were drafted at a time when the predominant culture endured that if the judge’s award clearly exceeded the husband’s best Calderbank offer then he paid the costs. Of course in the aftermath of this court’s decision in Gojkovic (No. 2) [1992] Fam 54 the obligation on the applicant to counter offer in response to an unacceptable Calderbank offer was plainly established. However that did not impact much on the culture. That was perhaps understandable throughout a time in which the applicant’s award in substantial cases was calculated by reference to her reasonable requirements. If the husband’s Calderbank proposal had not sufficiently recognised her reasonable requirements then he should pay her costs even if the wife had put her case higher than the judge’s assessment. Of course the culture encouraged the husband to put forward generous proposals, the more so if he perceived the wife to be unreasonable, in order to avoid the costs liability. Equally if the wife’s unaided reaction was to reject the husband’s Calderbank offer it enabled those advising her to issue a clear warning of the risks of going forward to trial. Thus it cannot be doubted that the Calderbank conventions as then understood made a significant contribution to the resolution of ancillary relief cases in the high range.

However, for all the reasons given by Mr Mostyn in his judgment in GW v RW ancillary relief cases are now litigated under very different principles. He has for long been an advocate for the proposition that in ancillary relief, as in Children Act cases, there should be no order for costs unless exceptional circumstances justify an order. He has found an ally from a quarter which I doubt he anticipated. The experience of the Senior Costs Judge, having taken over from the Principal Registry the task of assessing costs in ancillary relief cases, is in my judgment extremely significant. His view has undoubtedly influenced the report of the costs sub-committee. The committee has also factored in the considerations identified by Mr Mostyn in his judgment. The committee, upon which the relevant professional associations are duly represented, has endorsed the direction indicated by the Senior Costs Judge and by Mr Mostyn. The report has been adopted by PARAG without qualification. More importantly the report has the support of officials from the Lord Chancellor’s Department and the Legal Services Commission. Our judgments in these appeals add further support for the reform movement. To introduce the new regime it will be necessary not only to consider the required amendments to the Family Proceedings Rules but also the application of CPR 44.3 to ancillary relief proceedings. The ultimate shape is a matter of policy and the report of the sub-committee offers a carefully considered detailed model. If I were expressing my own view of the objective of the amendments I could not do better than to cite the following sentences from the letter of 27 January 2003 from the Senior Costs Judge to the President:

The Senior Costs Judge’s proposal demonstrates simplicity, clarity and overall fairness. Those should be the standards to which we aspire in all aspects of ancillary relief proceedings.

I agree with both judgments.