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Important: 2025 Legislative Change
The general rule: each party pays their own costs
Unlike most other areas of Australian law, family law operates on the principle that each party bears their own legal costs, regardless of the outcome. Even if you "win" your case, you will typically pay your own lawyer's fees.
This default differs sharply from the "loser pays" rule in civil litigation. In family law, parenting matters focus on the best interests of children rather than adversarial victory, and the ongoing co-parenting relationship should not be worsened by punitive costs orders. The default also encourages parties to bring legitimate concerns to court without fear of financial punishment for an unsuccessful application.
When costs orders are made (Section 114UB)
While the default is no costs order, the court has discretion to order one party to pay the other's costs when justified. Section 114UB sets out the factors the court must consider in exercising that discretion.
Mandatory factors under Section 114UB
When deciding whether to make a costs order, the court must consider:
- (a) Financial circumstances of each party — the court considers relative financial positions and each party's capacity to bear costs.
- (b) Whether any party is receiving legal aid — legal aid status and the terms of the grant are relevant.
- (c) The conduct of the parties — including pleadings, discovery, production of documents, and general litigation conduct.
- (d) Whether proceedings were necessitated by non-compliance — failure to comply with prior court orders is a significant factor.
- (e) The degree of success in the proceedings — under s114UB(7), costs may be ordered regardless of the degree of success.
- (f) Any written offers of settlement — including Calderbank offers, which are crucial for costs arguments.
- (g) Any other relevant matters — a broad catch-all allowing the court to consider all circumstances.
Key change under Section 114UB(7)
When costs orders are commonly made
While costs orders remain the exception, certain behaviours significantly increase the risk of an adverse order being made against you.
- Refusing to negotiate — unreasonably refusing to participate in dispute resolution, mediation, or settlement negotiations. The court expects parties to make genuine efforts to resolve matters without a trial.
- Making false allegations — pursuing claims the court finds to be false, exaggerated, or without foundation. This is particularly serious where allegations of family violence or child abuse are found to be fabricated.
- Non-compliance with orders — failing to comply with court orders or directions, particularly when this causes the other party to incur additional costs. This includes missing filing deadlines, failing to attend court events, or breaching interim orders.
- Failure to disclose — failing to provide proper financial disclosure or deliberately hiding assets. Breach of the duty of disclosure is viewed seriously by the court.
- Unnecessarily prolonging proceedings — pursuing unnecessary applications, requesting excessive adjournments, or engaging in delaying tactics.
Contravention proceedings: higher costs risk
Calderbank offers: your most powerful costs tool
A Calderbank offer is one of the most effective tools for protecting yourself from costs, or building a case for costs against the other party. Named after the English case Calderbank v Calderbank, it is a formal written settlement offer marked "without prejudice save as to costs".
How a Calderbank offer works
- You make a written offer — the offer must be marked "without prejudice save as to costs" and set out specific terms.
- Give reasonable time to respond — typically 14–28 days; too short a timeframe may undermine the offer's effectiveness.
- The offer is not disclosed at hearing — the judge decides the case without knowing about the offer.
- After judgment, the offer is revealed — if you achieved a better result than your offer, you have strong grounds for a costs order against the party who rejected it.
Effective vs ineffective Calderbank offers
Effective offers are clear, specific, and genuinely reasonable; give adequate time to consider; include the "save as to costs" notation; and are made after financial disclosure is complete. Ineffective offers have vague or unreasonably one-sided terms; an unreasonably short timeframe; the "save as to costs" notation missing; or are made before disclosure is complete.
Types of costs orders
Not all costs orders are the same. The type ordered determines how the amount is calculated and how much of the winning party's actual legal fees is recoverable.
Party-party costs (standard basis)
The most common type of costs order. Covers costs that are "reasonable and necessary" to conduct the litigation. Typically amounts to 50–70% of the actual costs paid by the receiving party to their solicitor. For example, if a party's lawyer charged $50,000 and party-party costs are ordered, the assessed amount might be $25,000–$35,000.
Indemnity costs (solicitor-client basis)
Assessed more generously — covers all costs except those unreasonably incurred. Reserved for exceptional circumstances: serious misconduct, abuse of process, or flagrant disregard of court obligations. Typically results in recovering 80–100% of actual costs. Ordered for deliberate false allegations, contempt of court, complete non-compliance, or vexatious litigation.
Costs thrown away
Ordered when one party's actions waste a hearing or court event — for example, seeking an adjournment on the day of hearing without adequate notice, or failing to comply with directions that causes a hearing to be vacated.
Costs in the cause
Costs of a specific hearing or application are deferred until the end of the proceeding. The party who ultimately succeeds in the overall matter will be entitled to those costs.
Costs orders and self-represented litigants
Being self-represented affects both what you can recover if costs are ordered in your favour and — importantly — does not protect you from having costs ordered against you.
What you can recover
If costs are ordered in your favour as a self-represented party, you can recover court filing fees paid; photocopying, printing, and postage expenses; expert report fees (valuations, family reports); travel costs to attend court; and subpoena conduct money paid.
What you cannot recover
The High Court established in Cachia v Hanes (1994) that self-represented litigants generally cannot recover compensation for their own time and effort. You cannot claim for hours spent preparing your case, lost income from attending court, or stress, inconvenience, or emotional costs.
Costs can be ordered against you
How to protect yourself from costs orders
The most reliable protection against adverse costs orders is conducting yourself reasonably throughout the proceedings.
- Negotiate genuinely — participate in dispute resolution and respond constructively to settlement offers.
- Make Calderbank offers — put reasonable offers in writing. Even if rejected, they protect you if the court outcome is more favourable than your offer.
- Comply with all orders — meet every deadline, file documents on time, attend every court event. Non-compliance is the most common trigger for costs orders.
- Disclose fully — provide complete and honest financial disclosure. Hiding assets is one of the fastest ways to attract an indemnity costs order.
Common questions
What is the general rule about costs in family law?
The general rule in Australian family law is that each party bears their own costs, regardless of the outcome. This differs from most other areas of law where the 'loser pays' principle applies. The rationale is that family law disputes involve deeply personal matters, and the ongoing relationship between parties — especially where children are involved — should not be worsened by punitive costs orders.
Has Section 117 been repealed?
Yes. Section 117 was repealed on 10 June 2025 by the Family Law Amendment Act 2024. It has been replaced by Section 114UB, which is contained in the new Part XIVC (Costs) of the Family Law Act 1975. The principles remain substantially similar, but the new provision clarifies that costs orders can be made regardless of the degree to which a party has been successful — not just where a party was 'wholly unsuccessful'.
What is a Calderbank offer?
A Calderbank offer is a formal settlement offer made 'without prejudice save as to costs'. Named after the English case Calderbank v Calderbank, it cannot be disclosed during the hearing on the merits, but can be shown to the court when determining costs. If the offering party achieves a better result at trial than the offer, this strongly supports a costs order against the party who rejected it.
What is the difference between party-party and indemnity costs?
Party-party costs (standard basis) cover costs that are reasonable and necessary to conduct the litigation. These are assessed at a lower rate and are the usual type of costs ordered. Indemnity costs (solicitor-client basis) are assessed more generously and cover all costs except those unreasonably incurred. Indemnity costs are reserved for exceptional circumstances such as serious misconduct or abuse of process.
Can a self-represented litigant receive a costs order?
Self-represented litigants generally cannot recover compensation for their time spent on litigation. The High Court established in Cachia v Hanes (1994) that litigants in person are not entitled to costs for time and effort spent on their case. However, they can recover out-of-pocket expenses such as filing fees, photocopying, and expert report fees.
How are costs assessed (taxed)?
If parties cannot agree on the amount of costs, the matter is referred for costs assessment (also called 'taxation'). A Registrar reviews each cost item against the Schedule 3 Scale of Costs in the Family Law Rules 2021. Disputed items are resolved by the Registrar. The assessed amount is typically 50–70% of what the successful party actually paid their lawyer.
In what circumstances are costs orders commonly made?
Costs orders are most commonly made when a party: unreasonably refused to negotiate or attend dispute resolution; made false allegations; failed to comply with court orders; unnecessarily prolonged proceedings; pursued frivolous claims; failed to make proper financial disclosure; or rejected a reasonable Calderbank offer. The court considers all circumstances under Section 114UB.
Are costs awarded in contravention proceedings?
Courts are more inclined to award costs in contravention proceedings (where one party has breached court orders) because the proceedings were necessitated by the other party's non-compliance. If you successfully prove a contravention, you have a strong basis for seeking costs against the party who breached the order.