As of July 1, 2004, all family proceedings in Ontario are governed by the Family Law Rules . These costs rules differ in many respects from the Rules of Civil Procedure that previously governed family law proceedings and, hence, distinguish family law from civil cases generally. Increasingly, under the Family Law Rules, the reasonableness of the parties in the conduct of the litigation is just as important a consideration as success.
Rule 24 of the Family Law Rules governs costs and is attached as Schedule A. Under this rule, costs are intended to indemnify successful litigants for the cost of proceedings, encourage settlement, discourage inappropriate behavior in litigation and preserve access to justice. While these policies reflect prior practice, the family court since 2004 has enjoyed less discretion in deciding costs. Judges award costs more frequently and in higher amounts under the Family Law Rules than had been the case under the Rules of Civil Procedure.
Under the Family Law Rules, the guiding premise is that costs should follow the event in all family law proceedings. Courts are directed to award costs to a successful party and should award full indemnity costs where a party is more successful than his or her offer to settle. Offers to settle are, therefore, of critical importance, since an offer can either effectively neutralise a party’s success or result in further penalty to the losing party. That is, a successful party who did not make a reasonable offer to settle will suffer in costs, as will a party who rejected a reasonable offer to settle.
In addition to the differences between the cost consequences in family law and general civil litigation, there are sometimes differences in the cost rules within family law itself, depending upon whether the matters at issue are financial or child related. In custody cases, the courts have adopted a somewhat different attitude, or perhaps simply a more tempered approach, to costs. The underlying rationale for that distinction is the belief that a party should not be discouraged from making a bona fide custody or access claim because of a fear of costs. Hence, no costs should be awarded where both parents present legitimate and meritorious claims. Until recently, the tendency was not to award costs in custody cases, except in extraordinary circumstances where a party has behaved improperly or unreasonably invoked court proceedings. However, that trend seems to be changing. Presently, in family law, costs are more often following the cause in both financial and custody matters.