“THE ONLY BENEFICIARIES FROM THIS NIHILISTIC LITIGATION HAVE BEEN THE SPECIALIST AND HIGH-QUALITY LAWYERS”: A FAMILY LAW CASE, POSTED WITHOUT COMMENT

October 29, 2021 · by · in Costs

Occasionally, very occasionally, this blog trespasses into the area of family law.  This is usually about costs or evidence. Today it is about costs, the comments of Mr Justice Peel in  Crowther v Crowther & Ors (Financial Remedies) [2021] EWFC 88  . It is, as they say, posted without comment.

“Each party thinks the other is, to use their own words, “out to destroy” them. These proceedings have been intensely acrimonious. They, and their lawyers, have adopted a bitterly fought adversarial approach. I asked myself on a number of occasions whether the aggressive approach adopted by each side has achieved anything; it seems to me that it has led to vast costs and reduced scope for settlement. The toll on each party is incalculable (W was visibly distressed during the hearing) and, from what I have heard, the impact on the children has been highly detrimental.”

THE JUDGMENT

    1. When starting my reading into this financial remedy case, I noted with dismay that W’s s25 statement is her 15th statement in the proceedings and H’s is his 26th. There have been no fewer than 34 court hearings. The bundles (4 of them; a core bundle, a library bundle and two supplemental bundles) exceed 6,000 pages. The parties have argued before me about almost every imaginable issue, no matter how trivial. Unsurprisingly, the legal costs are enormous:
i) W’s costs (excluding divorce, children, and occupation order proceedings, but including the costs of Admiralty proceedings and a preliminary issue referable to financial remedies) are £1,427,606;
ii) H’s costs (on a like for like basis) are £920,316.
  1. The total costs are therefore about £2.3m. Given that at the start of the hearing I was presented with a composite asset schedule on which W asserted the net assets to be £1,374,266 and H asserted the net assets to be £386,547, it can be seen that, subject to any finding of hidden resources, the costs are utterly disproportionate. My task is far more difficult than it should be precisely because the visible assets are now so limited. In the end, I have largely had to concentrate on how to divide the debts fairly.
COSTS LIABILITY
    1. As to costs, H is liable to W under two existing costs order in the total sum of £71,218. W is liable to H for costs under the order of Lieven J consequential upon the settlement agreement which, although not assessed, I estimate will be about £322,000, of which W has paid £80,000 (and is due to pay a further £100,000 under another interim payment).
    1. Should the costs order stand against W it would have the effect, broadly, of equalising the net effect outcome. That would be thoroughly unfair to W given the matters to which I have referred. I could provide W with more from the marital assets to take account of the costs, but that might be thought to be intellectually dishonest. As it happens, however, I have firmly concluded that, for the reasons above, H is guilty of litigation misconduct and should pay a proportion of W’s costs referable to the financial remedy proceedings which are about £735,000 (but not the preliminary issue or Admiralty proceedings, for which she alone must take responsibility). I consider that H should be responsible for approximately 25% of such costs, but it would be neater and simpler to make an order which has the effect of netting off all costs owed by one to the other so that there need be no further argument about costs assessment or payment. I intend, therefore, to make such order for costs as equalise all existing costs orders, to the extent that they are unsatisfied. Thus, by way of illustration:
Costs owed by W to H
£358,727 claimed by H
£322,000 due to H (assuming 90% recoverable on indemnity basis)
-£80,000 already paid on account by W
£242,000 assumed amount still payable by W to H
-£34,008 payable by H to W order 16 October 2019
-£27,210 payable by H to W order 24 February 2021
£180,782 net due by W to H
£180,782 is about 25% of W’s costs. The order I shall make is
that H must pay W such sum as equals the remaining sums due from W to H
under the costs order of 22 December 2020, after netting off the sums due
under the orders of 16 October 2019 and 24 February 2021.

THE LAST WORD

Last word

    1. The only beneficiaries of this nihilistic litigation have been the specialist and high-quality lawyers. The main losers are probably the children who, quite apart from the emotional pain of seeing their parents involved in such bitter proceedings, will be deprived of monies which I am sure their parents would otherwise have wanted them to benefit from in due course.

 

 

 

 

 

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