Judge tells divorcing parties to ensure they apply for expert costs cap

Parties in divorce disputes must ensure the court is asked to cap a single joint expert’s costs before they are instructed, the High Court has said.

Mr Justice Mostyn described this as “the moral of this unhappy tale”, at the end of his ruling on an application by the wife in a divorce that the husband indemnify her in respect of £65,603 she owed to her former solicitors, Vardags, after it paid the same sum to the expert instructed in their case.

The judge described Loggie v Loggie [2022] EWFC 2 as “a very unfortunate case” now into its ninth year of litigation.

In 2014, he granted permission for the parties to instruct Jason Lane of accountants Saffrey Champness on a single joint expert (SJE) basis to prepare a report on the husband’s business interests. He ordered that Mr Lane’s costs be met equally by the parties in the first instance.

The order did not limit their amount, although there is a power to do so under rule 25(12)(5) of the Family Procedure Rules (FPR).

Mr Lane quoted £72,000 plus VAT for the report but eventually invoiced £126,000 in 2015. This has been in issue since, with the husband only paying Saffrey some of what it was owed. Vardags paid the rest in August 2021 and sought to recover it from the wife.

The husband alleged that the wife had improperly interfered with his negotiations with Saffrey Champness by which he intended to reduce, if not extinguish, the amount owing.

The wife said Vardags had been able to negotiate a reduction of some £10,000 off the sum being sought by Saffrey Champness, being the interest owed.

Mostyn J said there was jurisdiction to give the indemnity and that, by a 2019 agreement which varied the court’s final order in the financial remedy proceedings, the husband agreed to take full responsibility for the outstanding amount payable to Saffrey Champness and to fully indemnify the wife against it.

In March 2019, the judge approved the agreement and made various technical variations to the final order but failed to include the explicit indemnity in favour of the wife in the body of it. “I consider that this was an oversight by me when I formulated the March 2019 order which gave effect to the agreement,” he said.

The accidental omission from the March 2019 order “cannot mean the husband can now seek escape responsibility to indemnify the wife”, Mostyn J said. “That is what he freely agreed to do, and he should be held to his agreement.”

He corrected the order under the slip rule in FPR 29.16 and granted the application for the husband to indemnify the wife in respect of the money she owed Vardags and any outstanding amount payable to Saffrey Champness.

Mostyn J concluded: “The moral of this unhappy tale is that the parties must ensure that the court is asked, prior to the instruction of a SJE, to place a cap on the expert’s costs pursuant to FPR rule 25(12)(5).

“Prior to the court making an order for the instruction of an SJE, there will have been preliminary enquiries raised with the proposed expert and responses given thereto. By virtue of PD 25D para 3.4, incorporating PD 25B para 8.1(e), the expert will have stated his/her costs, including hourly or other charging rates, and the likely hours to be spent conducting interviews, writing the report and attending court.

“The court will thereby be fully equipped to be in a position fairly to consider these figures and to impose a cap on the expert’s costs. Of course, should circumstances unexpectedly change causing far more work to be done by the expert, then it will be open for the expert to apply for the order imposing the cap to be varied under FPR r 4.1(6).”

Both parties appeared in person.

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Costs News
Published date
10 Feb 2022

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