Law firm is “not a charity” and should not have to offer credit to mother in child dispute

A High Court judge has ordered the multi-millionaire father of a child at the centre of a dispute with the mother to pay the incurred costs of her current, but not former, lawyers.

Mr Justice Cobb said the mother’s present solicitors, London firm Hunters, “is not a charity, nor it is a credit agent” and should not be expected to offer “unsecured interest-free credit in order to undertake their work”.

He was ruling in Z (Schedule 1: Legal Costs Funding Order; Interim Financial Provision) [2020] EWFC 80, involving the parents of a child who was only three weeks old at the time of the hearing. The American father, who is in his late 40s, has assets of $130m, while the English mother, in her late 20s, has returned home to the North-East of England with the baby since their relationship broke up. She claimed that, without this provision, she would be unable to fund the litigation.

The mother sought £71,000 to pay outstanding legal costs incurred by her previous lawyers in both England and the USA, but Cobb J declined to order it.

He noted case law, such as Rubin v Rubin [2014] EWHC 611 (Fam), that said the court could not make such an order unless it was satisfied that, without the payment, the applicant would not reasonably be able to obtain appropriate legal services for the proceedings. The court in Rubin said the jurisdiction was not used to outflank or supplant the powers and principles governing an award of costs in CPR part 44.

The mother also wanted £86,000 for the costs already incurred with Hunters. The judge said it was “notable” that £41,400 in costs were incurred in a three-week period before the baby was born.

Cobb J said: “In my judgment, it is not necessary for the mother’s debts to legal firms other than Hunters to be settled in order for her to maintain her current representation… I do not find that, without the payment to these [previous] firms, the mother will not reasonably be able to obtain appropriate legal services for the proceedings going forward.”

Given there was no other legitimate or accessible funding stream, he said Hunters “should not carry a significant debt in working for the mother unpaid; the firm is not a charity, nor it is a credit agent, and, as in Re F, I am of the view that it is neither fair nor reasonable to expect the firm, and chosen counsel, to offer unsecured interest-free credit in order to undertake their work”.

He added that he did not want the mother and Hunters to become bound or ‘beholden’ to each other by the existing debt. The firm had made clear that it would not continue to act if the mother did not succeed in her application. “This provides a sufficiently clear case that the firm has reached its tolerance. I am prepared to award the mother the sum claimed of £86,434, less 30% reduction for a notional standard assessment: £60,504.”

The mother went on to ask for £95,000 to cover the financial provision proceedings up to financial dispute resolution (FDR) appointment and a similar sum to cover contact and other issues up to any dispute resolution.

The judge noted that the father’s Form H for the hearing showed costs incurred of £51,000, compared to £128,000 for the mother. “There is merit in [counsel for the father’s] submission in urging caution against making an award which encourages the mother to litigate.

“In exercising my discretion, I consider that a discounted sum should be allowed to the mother for her future schedule 1 [financial provision] costs, in part to reflect the lower bills of the father, and I have concluded that she should receive £65,000 in this regard. This should take her to FDR in, say, six months’ time. I shall direct that this is paid in six instalments.”

Cobb J said he did not understand the mother’s claim for the contact proceedings given that “at present there is no real indication of any significant dispute between the parties”. It was “as surprising a claim as it is unwarranted”, while the father has offered to mediate the issues, pay the mediator’s fees and provide her with some upfront legal fees for her representation. The mother has apparently declined this.

The judge allowed £25,000 under this head, which he said “should more than amply cover the cost of inter-solicitor correspondence/negotiation”.

He ordered the father to make six separate monthly instalments towards the mother’s legal costs of £15,000 each.

James Roberts QC and William Tyzack (instructed by Hunters Law) for the applicant. Alexis Campbell QC (instructed by Mills & Reeve) for the respondent.

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Costs News
Published date
02 Dec 2020

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