“THERE MAY BE WORSE EXAMPLES OF DISPROPORTIONATE AND ILL-JUDGED LITIGATION, BUT NOT SPRING READILY TO MIND”: SPEND £600,000 OF COSTS AND GET £5,000 EACH

When I trespass into the area of family law it is, almost invariably, about the issue of costs. A prime example of the dangers of litigation and costs, almost literally, wiping all the family assets out, can be seen in the judgment of Mr Robert Peel QC (sitting as a High Court judge) in M v M [2020] EWFC 41.

“This self-defeating litigation is now over. It is scarcely credible that at the end of it all, they emerge with about £5,000 each of liquid assets, having incurred nearly £600,000 of costs, but such is the reality. There may be worse examples of disproportionate and ill-judged litigation, but none spring readily to mind.”

THE CASE

The judge was determining the financial position between a couple who had been married 21 years and who had three children.  The litigation had not been smooth, more significantly it had not been cheap.

COMMENTS ON COSTS IN THE JUDGMENT

  1. After nearly 22 years of marriage, which must have contained happy times together and during which 3 children were born to whom the Husband (“H”) and Wife (“W) are devoted, this couple embarked on ruinous and recriminatory financial remedy proceedings. There have been 13 oral hearings, including 2 FDRs and an aborted 5-day trial, and 4 applications by H for permission to appeal disposed of on paper at High Court and Court of Appeal level. The combined legal costs are £594,000. The litigation, and attendant bitterness, has led to fractured relations between H and the children.
  2. One might be forgiven for assuming that all this energy has been expended over great wealth. This is not so. The only liquid asset of any substance is the proceeds of sale of the FMH, some £630,000 currently held on solicitors’ account. That sum is now all but offset by the parties’ debts, not least the legal fees. Thus, the true net liquid wealth is virtually nil. I am left with the task of endeavouring to find a way in which each party can somehow be re-housed. That, in my judgment, is and always has been the real issue in this case.
  3. An equal division of £630,000 would be £315,000 per party from which each would have to meet their indebtedness. W’s open proposal at the start of trial was broadly for that outcome, but subject to the sum of £52,000 being top sliced to repay her brother who paid the mortgage for a period after separation. Thus, on her case each party would receive £289,000. H in his open proposal sought £480,000. The difference between the parties’ offers is £191,000. The legal costs are 3 times that figure. It is hard to express what a calamitous waste of resources this has been

Conclusion

  1. This self-defeating litigation is now over. It is scarcely credible that at the end of it all, they emerge with about £5,000 each of liquid assets, having incurred nearly £600,000 of costs, but such is the reality. There may be worse examples of disproportionate and ill-judged litigation, but none spring readily to mind.