COST BITES 365: SOMETHING AKIN TO COSTS BUDGETING IN A FAMILY CASE – WHERE SIX LAWYERS WERE EMPLOYED, ONE CHARGING £1,130 AN HOUR: “THERE IS SOMETHING OF A LACK OF REALITY IN BOTH SETS OF FIGURES”
There is no real equivalent to costs budgeting in the Family Court. On the whole this is a “no costs” jurisdiction. However we have something similar here. In essence the judge held that the applicant put forward an unrealistic “budget” and the respondent was unrealistic in its approach.
“The parties are miles apart which is very unhelpful for the court. Ms Campbell points out that A’s legal team involves six lawyers. The senior lawyer is charging £ 1, 130 A per hour. The other solicitors rates range from £ 680 to £ 395 an hour. Ms Campbell submits there is simply no need for six lawyers and the hourly rates are very high.”
KEY PRACTICE POINTS
Perhaps the key point here is the judge’s observations that both parties were “unrealistic”. The wife in her claims for costs and the husband in relation to the realistic figures. The same principles apply in relation to costs budgeting. Realism on both sides is likely to lead to the most effective results.
“I have done my best noting there is something of a lack of reality in both sets of figures. A takes an excessive approach. Z takes a hardline approach. I have applied a broad brush approach in the exercise of my discretion and if one side feels the order is too high or too low then they may consider taking a more realistic approach from forum to FDR should matters progress before this court.”
THE CASE
A & Z, Re (Service Out; MPS; LSPO) [2026] EWFC 64, Mr Justice McKendrick.
THE FACTS
The couple were divorcing. (To put matters into perspective the judge allowed an order for maintenance pending suit at £ 266, 188 per annum.) The wife sought an order for a Legal Services Payment Order to pay her own lawyers during the course of the proceedings. The judge found that an order should be made. There was some considerable dispute in relation to the amount of such an order.
WHAT HAPPENED IN A NUTSHELL
The judge ordered that £175,00o should be paid for historic costs and £700,000 for the costs to the end of a trial of a preliminary issue. The wife’s team did not require six lawyers, further the rates charged were too high.
THE JUDGMENT ON THE AMOUNT OF COSTS
- A seeks the following:
Historic costs: £226,204.11
Projected jurisdiction costs: £774,400.80
Projected financial remedy costs: £659,076.00
LSPO costs: £187,836.00
Total (per 17/11/25): £1,847,516.91
Additional funds spent £55,530.00
Additional funds spent £30,883.00
Additional funds (foreign proceedings) £180,105.00
Total additional funds: £266,518.00
GLOBAL SUM SOUGHT TO PFDR £2,114,034.91
- Z submits the total costs for the same period should be £ 165, 269. The parties are miles apart which is very unhelpful for the court. Ms Campbell points out that A’s legal team involves six lawyers. The senior lawyer is charging £ 1, 130 A per hour. The other solicitors rates range from £ 680 to £ 395 an hour. Ms Campbell submits there is simply no need for six lawyers and the hourly rates are very high. She makes reference to the Guidance on Solicitors’ hourly rates for City and Central London which range from £ 422 per hour for a category A lawyer to £ 157 for a category D lawyer. Mr Todd submits the number of solicitors and the quantum of the hourly rate are acceptable because this is, or effectively is, commercial litigation. He submits it is commercial in character because of the high value of the assets under consideration and because of the international nature of the proceedings. Mr Todd also submits that costs have been driven up by the approach taken by Z to the litigation in this jurisdiction and in the USA.
- Overall, I conclude, adopting a cautious approach, that six lawyers is excessive. Four is sufficient. The hourly rates are excessive. They will need to be reduced although not as far as Ms Campbell submits. The amount of work proposed in A’s legal team’s budget is excessive and unreasonable. It is fleshed out with an excessive number of unnecessary strategy meetings. I need only determine A’s budget until the forum dispute and will permit brief evidence and a short period of time at the conclusion of that hearing to determine the future budget to the FDR, should Z’s forum challenge fall away. I remind myself I am applying a budget to permit A to litigate fairly these issues. This is not commercial litigation and I am not aware of some similar form of LSPO order being made between two commercial entities engaged in commercial litigation. The LSPO is a statutory creation to deal with fairness between spouses in this situation.
- Mr McKirgan has filed a witness statement in support of his client’s LSPO order. He says Vardags have not received payment for costs incurred. Applications for litigation funding were refused. Vardags will not enter into a Sears Tooth Without a LSPO Vardags will need to come off the record. Mr Todd submits this evidence meets Mostyn J’s test in Rubin v Rubin for the payment of historic legal costs. Without this A would be unrepresented.
- Ms Campbell has made similar submissions in respect of the LSPO application as she did on the MPS, given the short childless marriage with, she submits, only non-matrimonial assets. Vardags were instructed on 3 October 2025. Ms Campbell notes that Vardags alone incurred £187, 355 over twenty-three working days.
- On balance I am satisfied that historic costs should be included in the LSPO. Within my broad discretion A will not reasonably be able to obtain appropriate legal services for the proceedings. I am applying the principles helpfully summarised by Peel J at paragraphs 28 and 29 of KV v KV [2024] EWFC 165.
- A cannot provide any form of undertaking. This must also be factored in to the budget.
- I remind myself that my task is to identify a solicitor/client budget for A, to enable them to litigate in circumstances where they cannot reasonably be expected to access their own limited resources. I must determine a reasonable budget taking into account the necessary caution arising out of the forum I am not assisted by the proposals put forward by the parties which are so far apart. The appropriate approach to quantum, is whether the costs sought are “reasonable, in the context of the nature of the litigation, the issues, the resources, and how each party is approaching the proceedings” (see Peel J in HAT). I have taken into account Z’s more modest legal team. Their solicitors’ hourly rates range from £ 525 for a partner to £ 295 for a solicitor. The largest hourly rate is less than half that of the partner at Vardags. No proper explanation is provided for this.
- Applying the overarching principles set out above, I award £175, 000 for historic costs. I am adopting a broad brush approach but the sum has been reduced having concluded that: (i) the amount of work billed is excessive; (ii) the hourly rates are excessive; (iii) the deployment of six solicitor is excessive.
- Applying the same approach the £187, 836 LSPO costs are excessive. I accept Ms Cambell’s submission this figure involves double counting a CMH and the LSPO/MPS hearing, which is not permissible. They are reduced to £ 125, 000 again applying a cautious approach and reducing the costs in the three areas set out above.
- A seeks £774, 400 for the projected jurisdiction costs. This is also excessive. It is predicated on a five day hearing. There will likely be only three witness and brief submissions. There will be a forum hearing before me in July. Three days of court time will be provided, not five (although I will provide reading and judgment writing time but that will not drive up A’s costs). I reduce the budget for jurisdiction to £400, 000. I have factored in the fact A has required further work to be undertaken on service of the divorce application on Z. This works out at a monthly budget of around £100, 000 (on the basis further work would have been undertaken since the February 2026 hearing).
- The LSPO order will therefore permit A to settle the majority of their historic costs, deal with the costs of the contested LSPO/MPS application and permit them a budget to fully litigate the jurisdiction/forum It is a much lower figure that A sought but I am clear that they do not reasonably need six lawyers charging high hourly rates. It is a much higher figure than Z sought. I have done my best noting there is something of a lack of reality in both sets of figures. A takes an excessive approach. Z takes a hardline approach. I have applied a broad brush approach in the exercise of my discretion and if one side feels the order is too high or too low then they may consider taking a more realistic approach from forum to FDR should matters progress before this court. The order will provide for £ 700, 000.
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