17 June 2026

Costs capping in NSW Family Provision Claims - your costs may not be recoverable in full

Jessica Woodhouse

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The NSW Supreme Court is increasingly capping legal costs in family provision proceedings, especially in smaller estates.

Two recent Supreme Court decisions, Lord v Craig [2026] NSWSC 17 (Lord) and Re Estate Weinberger [2026] NSWSC 158 (Weinberger) illustrate why the Court is taking control of legal costs in family provision cases and the likely impact on parties and practitioners involved in those cases going forwards.

What is costs capping?

Costs capping (called a maximum costs order in the court rules) is a limit on legal costs set by the Court. Normally, after a case concludes, the successful party can ask the losing party to pay their legal costs. But with a costs cap in place, a party cannot make the other side or the estate pay more than the specified cap in legal fees.

The main goal of costs capping is proportionality – to keep legal fees reasonable compared to what’s at stake in the case. This is especially important in family provision cases over small estates where, without restraint, legal fees can quickly consume all or most of the estate available for distribution.

Costs capping motivates all parties to litigate efficiently and consider settlement options as the statutory law requires the quick, just and cheap resolution of family provision legal disputes.

Early costs capping: a key development from Lord

Historically, costs capping orders were only made by the Court after a final hearing when the outcome was known.

However, in Lord, the Court made an interlocutory costs capping order at an early stage of a family provision matter – after an unsuccessful court-ordered mediation but before the matter had been prepared for a final hearing. This is the first recorded instance in NSW of early costs capping in family provision proceedings.

Two siblings were battling over their late father’s estate of about $135,674. By the conclusion of a mediation, their combined legal bills were already about 46% of the entire estate. If the claim had gone all the way to a final hearing, estimates showed legal costs could balloon to around 88% of the estate.

The Court stepped in and capped both parties’ costs – neither side would be allowed to recover more than $22,500 in legal fees from the other side or from the estate. The order could be varied later if special circumstances made that necessary.

Why does this matter? Lord confirms early costs capping:

is available and can be appropriate where costs risk exhausting the estate;
will be set at a level taking into account the circumstances of the case;
will give parties certainty about cost recovery and exposure; and
can improve settlement prospects.

Costs capping on a final basis: lessons from Weinberger

While Lord focused on early intervention, Weinberger shows how costs can be controlled by the Court following a final hearing of a family provision claim.

In Weinberger, the estate was modest (approximately $400,000 to $500,000) and the dispute was between a disabled son (the plaintiff) and the deceased’s former de facto partner (the defendant).

The Court proposed a family provision order of $125,000 in favour of the disabled son, but that award was premised on the basis that the lawyers for both parties would submit to an order capping their costs at $70,000. The plaintiff’s actual costs were $105,000. The estate’s actual costs were not recorded in the Court’s judgment.

The Court made clear that:

the quantum of provision for the plaintiff could not be determined in isolation from the legal costs incurred; and
the Court would step in to actively preserve as much of the estate for the plaintiff and the defendant as possible.

Practical takeaways

Costs scrutiny is front and centre: The Court is now actively managing costs to protect estate value, not just dealing with them after the event.
Proportionality is essential: At all stages of family provision claims, legal costs must be kept reasonable compared to the size of the distributable estate.
Small estates are high risk: Where estates are modest, practitioners must scale work appropriately, avoid standard litigation approaches, and expect judicial intervention if costs escalate. Equally, parties must adjust their expectations as to the work which can be undertaken by their legal representative.
Prospective costs capping is likely to increase: Practitioners should expect more interlocutory capping applications and the Court raising costs capping on its own initiative.
Costs may shape the outcome of a family provision claim: As seen in Weinberger, costs can directly influence the level of provision awarded by the Court. Excessive costs may reduce or even negate any practical benefit to a family provision applicant.
Consider early settlement: If costs capping orders are made on an interlocutory basis, or there is a prospect of costs capping orders being made at a later stage of the matter, explore settlement options and enter into negotiations sooner.
The law requires the quick, just and cheap resolution of legal proceedings: This means that clients and legal practitioners must not lose sight of the real issues in dispute and their quick resolution.