We looked at the new regime which is to govern ancillary relief cases in Benchmarks on 20 January 2000.

The Family Proceedings (Amendment No 2) Rules 1999 roll out nationally from 5 June 2000 the ancillary relief pilot scheme which has so far run in 29 courts.

It will have been clear from my previous article that I regard the new regime as A Good Thing and that I am sure litigants and the profession will be greatly assisted by the new rules.

Nothing in this article will amount to a recantation, but there are some areas of the new rules relating in particular to costs which, to say the least, require some unpacking.RecapHere is a recap of the overall costs position from 5 June.

With limited exceptions, the costs provisions in the Civil Procedure Rules 1998 part 44 have already been applied to family proceedings.

The fundamental rule that the unsuccessful party must pay the successful party's costs (CPR r 44.3(2)) is excluded, as was the presumption that costs follow the event in RSC Ord 62, but comes back in through the back door as a result of Gojkovic v Gojkovic [1992] 2 FLR 233 (see the judgment of Butler-Sloss LJ).

Accordingly, the rules as to conduct, offers to settle and the general principles of proportionality, to which family lawyers are no strangers, apply to ancillary relief.

Under the new FPR, r 2.69A to 2.69E superimpose on to this basic structure some specific rules relating to ancillary relief.

After making provision for offers to settle 'without prejudice except as to costs' (a statutory enshrinement of Calderbank) principles are set out which envisage the two following sets of circumstances:1.

Judgment or order more favourable than an offer made by the other party (r 2.69B);2.

Judgment or order more favourable than offers made by both parties (r 2.69C).Better than oneUnder r 2.69B, if the result for the applicant is more favourable to them than an offer to settle made by the other party, the court must, unless it considers it unjust to do so, order the other party to pay the applicant's costs incurred from the date 28 days after the offer was made.

What is or might be unjust will be considered below.

The following points immediately spring to mind here:-- No account is taken of any offer to settle made by the applicant.-- If the other party is legally aided this provision would seem to conflict with the statutory provision (at present in the Legal Aid Act 1988 s.17) which sets out a procedure which must be gone through before any order for costs can be made.

Clearly, the statute must take precedence over the rules.

Plenty of room for clever legal argument here!-- The provision only bites 28 days after the date of the offer.-- How does one decide in ancillary relief cases who has obtained the more favourable result? This may be clear in some cases but in many there will be room for prolonged argument.An even more tangled web emerges when one considers all the possibilities.

What about a respondent who makes no offer at all? He is not caught by the rule.

Why should someone who does nothing be better off than someone who makes an inadequate offer but at least tries to settle? If he does nothing at all and then makes a cunningly timed offer 29 days before the hearing will this mean he only has to pay one day's costs?Better than bothYou might have thought that r 2.69B was complicated but it now gets worse.

Under r 2.69C, where both parties have made offers to settle and the result is more favourable to the applicant than both offers, in addition to the rule 2.69B powers, the court may order interest on any money awarded at 10% above base rate from a date beginning 28 days after 'the offer' (which offer?) plus costs on the indemnity basis from the same date where it considers it just.

The comments made in respect of r 2.69B also apply here, but there is more to say.Once again, why should this only apply to a respondent who has made an offer? What about the respondent who makes no offer at all? Surely they are more deserving of these penalties? It may be said that the court has power to award indemnity costs in any event (I will return to this point below), but the power t o award interest at such a penal rate can only be derived from some rule or statute and it must be the case that such interest could only be awarded where all the elements of rule 2.69C applied; in other words, where the applicant has made an offer but the respondent has made no offer, and the applicant beats her own offer, the penal rates of interest could not be awarded.Just or unjust?So how does the court decide what is or is not just or unjust for the purposes of these two rules? The answer is in r 2.69D.

In considering these matters the court must take into account all the circumstances of the case including (inter alia) the terms of any offer to settle, the stage of the proceedings when the offer was made, and the conduct of the parties.

This sets out the matters to be addressed but does not, of course, change any of the comments made above about the apparent inconsistencies in these rules.The approachHow should we approach these costs provisions in r 2.69B and C? The only answer which makes sense is that the provisions are basic minima; they are the very least the court should do when these circumstances apply.

They enhance and do not affect the general powers of the court derived from CPR part 44 and Gojkovic.

Useful parts of CPR r 44 in this context are those in r 44.3(5) and (6) which allow the court to identify specific issues, to decide who has succeeded on those issues and whether it was reasonable to ventilate them, and to make specific costs orders directed to those issues.

This could be very advantageous in ancillary relief.And by the wayI end with one observation on a different point altogether but which is not without practical significance.

It has long been the practice for solicitors to serve their ancillary relief applications themselves.

The new rules (r 2.61A(4)(b)) provide that the court must serve the Form A on the respondent within four days of issue.

No room for doubt there; the applicant will not be allowed to serve it and the court is obliged to do so.

Within four days? Makes you think, doesn't it?