What factors does the court take into account when considering costs?
Wilson LJ, in the case of Baker v Rowe  EWCA Civ 1162
, stressed that the fact that one party had been unsuccessful would often be a decisive factor in the exercise of the judge’s discretion as to costs. While often decisive, the buck does not always stop with the losing party as there are a number of factors which the court should consider when using its discretion. These factors are helpfully set out in Joy v Joy-Morancho and Others (No.3)  EWHC 2507
The judgment in Joy v Joy-Morancho and Others
set out that even in the realm of the ‘no order’ principle, the court must have regard to the following factors when considering whether a costs order is appropriate:
(a) any failure by a party to comply with the rules, any order of the court or any practice direction which the court considers relevant;
(b) any open offer made by a party;
(c) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;
(d) the manner in which a party has pursued or responded to the application or a particular allegation or issue;
(e) any other aspect of a party’s conduct in relation to the proceedings which the court considers relevant; and
(f) the financial effect on the parties of any costs order.
In addition, as per PD28A para 4.4, the court must also have regard to the obligation of the parties to help the court to further the overriding objective. The court should also take into account the nature, importance and complexity of the issues in the case.
The case of Joy v Joy-Moroncho and Others
also reminded family practitioners that they are not confined to the FPR 2010 and that the court can also rely on relevant parts of the CPR when using their discretion in awarding costs. In particular, the court may rely on CPR rule 44.2, and consider:
(a) the conduct of all the parties including, conduct before and during proceedings and whether the pre-action protocol was followed; whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue; the manner in which a party has pursued or defended an issue; whether the claim has been exaggerated, albeit successful;
(b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and
(c) any admissible offer to settle made by a party which is drawn to the court’s attention, and which is not an offer to which costs consequences under Part 36 apply.
It was against this legal backdrop that Roberts J considered H’s application for costs.
Each party’s position
H sought to rely on the fact that he had been the successful party in the proceedings; put simply, he had made an application for the set aside of the consent order on the basis of material non-disclosure. The court had found that there had been material non-disclosure; they had set aside the order as per H’s application and, according to H, such finding should be reflected in the costs order. Although W had made an offer to contribute to H’s costs, the offer was for just £50,000, a mere 6% of the costs. In the circumstances, such an offer was unreasonable and H could not accept it.
W’s position was that although she had lost the case, the reason the costs were so high was, in part, due to H’s litigation conduct. For example, he had, on the wife’s case, been obsessive in litigating against her and had been adamant that her non-disclosure was not only material but also fraudulent. H’s determination to push the fraudulent non-disclosure argument resulted in greater legal costs. H had also spoken to the Daily Mail and divulged confidential information from the proceedings, including extracts from W’s Form E. W attempted to rely on this indiscretion to justify her vague response to questions throughout proceedings.
Roberts J struck a difficult balance in applying his discretion in awarding costs, considering not only the outcome of the set aside application but also each party’s litigation conduct. The very practical reality that W was now facing extreme financial difficulties was noted by the court. Whilst Roberts J was sympathetic to W, and went to great lengths to reiterate that he had not found her non-disclosure to be fraudulent, there was no shying away from the fact that H had succeeded in his application to set-aside the order: ‘the central issue in the circumstances following the Odey Investment in B Ltd was the fundamental ‘drive’ for the hearing. H was successful in establishing the grounds for the setting aside of the consent order thus his successor the fundamental ground is a critical factor which I must fold into my deliberations in relation to costs under CPR r 44.2(4)(b) irrespective of his own conduct under CPR r 44.2(4)(a)’. It was accepted that W had made a serious offer to H during the course of proceedings in 2014 but the fact that she had lost the application could not be ignored.
Although H had gone to the press in the past, W’s concerns in relation to H abiding by the rules of confidentiality did not justify the misleading comments she provided throughout the proceedings. Ultimately, ‘the tragedy of these current costs [was] that most of them could, and should, have been avoided by a clear and transparent response from W at the outset.’
In considering the parties’ conduct throughout proceedings, Roberts J noted that H’s conduct did have to be taken into account as it had ‘fallen short of what might be expected of him in terms of his conduct in relation to the litigation’. Finding that H had approached the Daily Mail journalist with malign intent towards W, Roberts J considered that his task in this application was to ‘stand back and address the global perspective of this litigation with a broad brush, just as Sir Peter Singer did in Joy v Joy Marancho
Having stood back, Roberts J rejected H’s application for the immediate payment of substantial sum for the costs and instead ordered that W must pay to H 50% of his costs, to be assessed on an indemnity basis. Although H had succeeded in his application to set aside the application, his litigation conduct in consulting the press, the fact that W had succeeded in defending the accusation of fraud, and the offer made in February 2014 could not be ignored and justified a reduction in the costs to 50%.
This may not be the last we have heard of AB and CD: Roberts J stayed the application on costs until the financial remedy application had been heard and thus H was not successful in obtaining immediate payment of the costs.
AB v CD
 EWHC 2482 highlights the importance of litigants considering their litigation conduct throughout proceedings. The courts have wide discretion in relation to costs. This case serves as a stark reminder that a successful application is simply not enough to guarantee that the “losing” party in cases will walk away with a costs order made against them.