Balancing False Allegations and Litigation Costs in Children Act Proceedings: A New Approach

Introduction

The judgment in E (Children: Costs) [2025] EWCA Civ 183 from the England and Wales Court of Appeal (Civil Division) deals with a highly intricate and emotionally charged family law matter. The case emerges from contested Children Act proceedings following the breakdown of the marriage between the parents, who had four children. The father, acting as the appellant, challenges the refusal of his application for an order under which the mother would cover his legal representation costs incurred during a lengthy and convoluted fact-finding hearing.

The background of the case is acrimonious. Both parties made allegations of domestic abuse against each other, while the mother additionally made far-reaching sexual abuse allegations implicating the father – including claims of his involvement in a paedophile "sex-ring" and allegations of rape. These serious allegations prompted the intervention of the local authority and the police with a series of interviews and complex evidential disclosures. Given the extraordinary nature of the claims, an extensive fact-finding hearing was convened, during which both parents’ testimonies and associated evidentiary submissions were scrutinized in detail.

Summary of the Judgment

The extensive 68-page judgment ultimately addressed multiple issues ranging from the veracity of the allegations to proper conduct in litigation, and crucially, the proper approach to costs in such contentious circumstances. While the judge recognized that both parties had succeeded and failed in part with respect to their allegations, the core findings were that:

The father was found to have engaged in aggressive and threatening behavior towards the mother, including incidents of physical aggression.
The mother, though entitled to legal aid on the basis of her domestic abuse complaints, had embarked on extreme allegations regarding sexual abuse that not only went unproven but also contributed to a costly and prolonged fact-finding process.
The fact-finding hearing was marred by administrative errors, late disclosures, and repeated delays, significantly inflating the legal costs incurred by the father.
The judge’s evaluation acknowledged the mixed nature of the evidence: while some domestic abuse allegations against the father were upheld, the serious sexual abuse allegations involving the children were not established beyond doubt.

Regarding costs, the judge declined to make an order in favor of the father on the basis that both parties experienced partial success and failure in their respective arguments. However, on appeal, it was determined that the judge should have isolated and given weight to the detrimental impact of the mother's false sexual abuse allegations. Accordingly, the appeal was allowed on that point, and a new costs order was substituted, directing that the mother pay half of the father’s costs incurred up to 3 July 2024 in relation to the Children Act proceedings.

Analysis

Precedents Cited

The judgment references a number of seminal cases which have helped shape the principles of costs orders in family proceedings:

R v R (Costs: Child Case) [1997] 2 FLR 95: This case provided early guidance on awarding costs in children matters where one party’s litigation conduct was found to be unreasonable.
Re T (Children) (Costs: Care Proceedings: Serious Allegation Not Proved) [2012] UKSC 36 and [2013] 1 FLR 133: These Supreme Court decisions underscored the need for consistency in applying costs principles across both public and private law proceedings and reinforced the general rule against making costs orders unless there is reprehensible or unreasonable conduct.
Re S (A Child) (Costs: Care Proceedings) [2015] UKSC 20, [2015] 2 FLR 208: This authority further affirmed the approach that exceptional circumstances must be demonstrated for departing from the general presumption of no costs orders in cases involving children.
Re J (Costs of Fact-Finding Hearing) [2009] EWCA Civ 1350, [2010] 1 FLR 1893: The judgment discusses the earlier rationale where a “ring-fenced” or split hearing might justify a different costs analysis; however, the more recent Supreme Court decisions have rejected a separate test for fact-finding hearings in children proceedings.

These precedents influenced the court’s analysis by setting out the criteria for when a costs order can be imposed, emphasizing that any deviation must be the result of conduct that is both reprehensible and unreasonable. In this case, although both parties exhibited problematic legal conduct, the unique and unfounded sexual abuse allegations advanced by the mother were deemed sufficiently serious to warrant a tailored assessment.

Legal Reasoning

The judge’s legal reasoning in the case was underpinned by a four-fold analysis. First, a comprehensive examination of both parents’ overall litigation conduct was performed, with a detailed assessment of the evidence presented during the fact-finding hearings. A key aspect was the differentiation between the allegations of domestic abuse—which, in part, were substantiated—and the extreme sexual abuse allegations which could not be objectively corroborated.

Second, the court considered the principle that costs should not be awarded in children proceedings unless there is clear and serious evidence of reprehensible or unreasonable litigation conduct. In families, there is a recognized tendency to avoid cost sanctions due to the broader need to preserve access to justice. However, in this instance, the court found that the extraordinary, unfounded sexual allegations made by the mother played a significant role in prolonging the proceedings and causing undue financial strain on the father.

Third, the judge examined whether the administrative delays and the subsequent impact on legal costs could be directly attributed to the conduct of the parties. Through a detailed evaluation, it was determined that while the adjournment of the January hearing was officially attributed to disclosure issues by third parties, the underlying motive was linked to the pursuit of the sexual allegations by the mother.

Lastly, the court rejected the proposition that a wholly distinct costs test should apply in acrimonious cases or where public funding is involved. Instead, it reinforced that the same well-established principles of costs orders should be applied across both public and private law proceedings in children cases. As a result, the court modified the earlier decision and imposed a proportional costs order reflective of the specific harms caused by the false allegations.

Impact on Future Cases and Legal Practice

This judgment is poised to have significant repercussions in the field of family law, particularly regarding cost sanctions in cases where extreme allegations are levied in litigation. Its impact includes:

Clarification on Costs Orders: The decision reinforces that even in children cases—traditionally seen as a domain where costs orders are sparing—courts retain the discretion to impose cost sanctions in cases of serious, unfounded allegations.
Balanced Evaluation of Evidence: Future cases will likely reference the rigorous analytical approach adopted by the Court of Appeal when balancing substantiated allegations with those that are uncorroborated or driven by personal motivation.
Deterrence of Unfounded Allegations: By linking the pursuit of extreme claims to increased costs, the decision may serve as a deterrent against bringing forward allegations merely as a tactical maneuver in contested family disputes.
Uniform Application of Precedents: The judgment reiterates the uniform application of Supreme Court precedents regarding the costs framework, thereby discouraging any attempts to carve out special rules based solely on the nature of the proceedings.

Complex Concepts Simplified

Several legal concepts in the judgment merit simplification:

Fact-Finding Hearing: A specialized hearing designed to rigorously examine disputed facts (in this case, allegations of abuse) separate from the main determination of custody or contact. The judge’s analysis shows that even though such hearings might be “ring-fenced” for fact-finding, they still fall under the umbrella of general principles for awarding costs.
Reprehensible or Unreasonable Litigation Conduct: This refers to behavior during legal proceedings that is not only improper but causes unnecessary delay or expense. The court’s decision highlights that extreme and unfounded sexual abuse allegations fall within this category, particularly when they are unsupported by objective evidence.
‘Clean Sheet’ Approach: A proposal that, in certain acrimonious cases, the court should disregard previous cost principles in favor of starting afresh with its assessment. The judgment rejects this notion, insisting that the established approach to cost awards should apply uniformly.
Legal Aid Gateway: The father’s argument sought a costs order not just for direct reimbursement but also as a precursor to an application under LASPO (Legal Aid, Sentencing and Punishment of Offenders Act 2012) to have his costs met by the State. The court, however, determined that such a gateway cannot override the standard tests applied to costs orders.

Conclusion

The Court of Appeal’s judgment in E (Children: Costs) [2025] EWCA Civ 183 marks a significant development in family law. By carefully weighing the detrimental impact of unfounded sexual abuse allegations against the backdrop of overall litigious conduct, the judgment provides a refined blueprint for determining costs in highly charged family disputes.

Key takeaways include:

The reaffirmation of established costs principles in both public and private law proceedings, with no room for a separate approach in fact-finding hearings.
A clear message that extreme, baseless allegations—especially those that prolong proceedings and increase litigation costs—may trigger a costs order, even in traditionally sensitive children cases.
The necessity for litigants and their counsel to maintain a balanced and evidence-based approach when presenting allegations, lest they risk adverse financial sanctions.
Recognition that courts retain broad discretion to ensure that the ends of justice are met, and that no party should be allowed to manipulate proceedings to their financial advantage.

In summary, this judgment not only resolves the immediate dispute over legal costs but also establishes a clearer precedent for handling costs orders in complex and acrimonious children proceedings. It underscores the importance of maintaining rigorous standards in assessing litigation conduct, thereby shaping a more equitable framework for future cases.