David Hodson on International Family Law: English family law costs all at sea
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Sep 21, 2012, 11:05 AM
Article ID :100371
The English media have greatly relished this week reporting on a short leave to appeal hearing in a divorce financial case involving two practising lawyers. They were gleeful in their criticism of the couple who had been married for 10 years and separated in 2008 with, at that time, a property in south-west London worth about £3.2 million and the husband being a partner in a substantial London practice earning almost £500,000 per annum. But only four years later and after considerable litigation, the wife received all that was left being only £90,000 with the husband holding onto debts. Astoundingly, the legal fees on both sides were about £900,000.
There was a real nautical theme. The first instance judge, Judge Clive Million, a very experienced and wise practitioner, said "the ship of marriage may founder but this couple have driven theirs full tilt onto the rocks".
Another judge involved in the case said "they had wrecked the ship of their marriage and then turned their attention to the lifeboats".
The wife already had spousal maintenance, alimony, of £48,000 per annum, which is tax free in England. But she wanted an increase of between £66,000 and £88,000 per annum, also tax-free. Her appeal was rejected. The appeal judge referred to the three children being privately educated at a cost of £36,000 per annum and that no more could be afforded. He called the impact of costs a catastrophe for the family.
They had spent about £550,000 on proceedings regarding their children, about £300,000 on the financial proceedings and costs on other proceedings in the family courts being in total just under £900,000.
Even counsel for the wife could not prevent indulgence in nautical terminology. Jonathan Todd said very rightly that it was a sad case in which the parties had spent almost all their assets in litigation. Referring to the remarks of Judge Million about "sinking ships and doing the best the judge could in the circumstances to keep both parties and the children in lifeboats", Mr Tod said the "court was asked to consider whether in fact one party had been given a financial lifeline and the other left holding onto a mooring buoy waiting to be saved".
It puts in mind another case, many years ago, of Piglowska in 1999 in the House of Lords, now the UK Supreme Court, where the assets were about £127,000 and the costs were about £128,000. There was nothing left. Yet one party had won in litigation at first instance and at every level of appeal save one when Ward LJ gave leave to appeal to the House of Lords which appeal was eventually unsuccessful.
In England as in many jurisdictions there are sometimes parties who will both be intent on litigating without any regard for the impact of the costs on the finances, the other family members, the children's future and similar. They are invariably driven by wholly non-commercial intentions. Often it needs lawyers and the judge together to do the best for them, even if they themselves don't know what is the best, to prevent the complete destruction, the driving of the ship onto the rocks as the judge referred to it. The emotion of the relationship breakdown can cause a complete breakdown in any commercial awareness and proportionality.
But in the condemnations about lawyers costs there is another player. The judge. Costs of £900,000 are not incurred before the first hearing. It takes many hearings. In English family law financial proceedings there is an obligation at almost all hearings to produce details of the costs incurred to date and sometimes the costs which will be incurred up to the final hearing. So the judge and the parties should know how the costs are running.
England is moving dramatically towards a more interventionist and inquisitorial approach with strong case management, and away from the old-style adversarial. Of course there will always be a few cases which fall through the net and costs increase without any control or condemnation. But many cases where costs become clearly disproportionate could and should have been tackled much earlier on by the judge and weren't. Some practitioners consider some judges are remarkably weak when faced with high costs incurred by one party and reasonable modest costs by the other party. Invariably, very little is said.
Disproportionate and very high legal fees do no good for any family justice system including its practitioners. Of course it makes very easy headlines. The underlying problem is much more complex. The easy answers are rarely the right ones. The couple in this particular case may have drowned the family finances and the future of family fortunes. But a much more solid foundation is needed to overcome excessive and disproportionate costs.
He is an English specialist accredited solicitor, mediator, family arbitrator, Deputy District Judge at the Principal Registry of the Family Division, High Court, London and also an Australian qualified solicitor, barrister and mediator. He is a Fellow of the International Academy of Matrimonial Lawyers and chair of the Family Law Review Group of the Centre for Social Justice.