“Churn and burn” legal fees – how do we manage them?

March 29, 2023

At Fox and Thomas, we particularly enjoy our work when our family law clients work “amicably” with their former partner towards a resolution by embracing mediation, proper disclosure and efficient communication.  But in cases where one party will not properly engage in the process, unnecessary costs can quickly pile up.  In those situations, we strongly recommend involving the Court to advance the matter towards a resolution.

You want to settle “amicably” but your ex won’t play ball

Most people who separate want to do it “amicably” and without the involvement of the Court.  Whilst with the help of lawyers, financial agreements or consent orders can be made on property or parenting matters without starting proceedings in the Court, sometimes this is just not possible because a party will not “play ball” and engage in appropriate dialogue, respond to offers, attend mediation or provide disclosure of documents.

When we have a matter where legal fees are being expended which do not advance the issues towards a resolution, we refer to it as a “churn and burn”.  This means we have correspondence going back and forth between the lawyers which does not assist in reaching a resolution, help the parties to avoid the Court process or deal with pressing parenting or child support matters.  In matters like these, legal fees can very quickly rack up without any meaningful progress being made.

Issue a Notice of Intention to Commence Proceedings

Under the new Federal Circuit and Family Court of Australia Rules, when we see the churn and the burn of legal fees happening, we can issue a notice of intention to commence proceedings to the other party.  This is a powerful notice which:

1. sets out the issues in dispute between the parties;
2. outlines the orders to be sought if proceedings are issued;
3. puts forward a genuine offer to the other to resolve the matter;
4. stipulates a timeframe (at least 14 days) in which the other party must respond.

Issue proceedings and allow the Court to take control of the matter

If the other party does not respond within the required time in any meaningful way, you can issue proceedings against them in the Court and you are able to satisfy the Court that you tried to engage in alternative dispute resolution to resolve the matter.

Once you have filed proceedings, the parties are allocated a date to attend Court about 1 to 2 months later which is known “first return date”. On this date, the Court will:

1. enquire as to why the formal processes of disclosure or alternative dispute resolution have not been undertaken; and
2. generally order the parties to some form of private mediation or mediation within the Court precinct.

In some cases the Court will may also make a costs order against the party who is the defaulter (eg. the party who would not engage in alternative dispute resolution or the disclosure process).

By issuing proceedings, you enable the Court to take control of the matter and put in place orders and directions to advance the matter towards either resolution or a trial.  Sometimes the Court is the only method by which you can seriously engage with the other party so that they are focussed on the problem at hand and turn their mind to the resolution.

Please contact a member of our Family Law team if you have any questions about this topic or other family law related matters.