Not for wealthy wife to “bankroll” unreasonably conducted divorce litigation

It was not for a wealthy wife to “bankroll” divorce litigation which was “unreasonably conducted” by her “struggling artist” husband, the High Court has ruled.

Mr Justice Cohen found that it was “wholly disproportionate” for the husband in MB v EB [2019] EWHC 3676 (Fam) to spend £650,000 in costs on what “should have been a very easy case to settle”.

The wife, with assets of £50m, had funded £236,000 of that sum, with the husband paying £36,000, leaving around £380,000 inclusive of interest outstanding to his solicitors.

In an earlier hearing, Cohen J determined three issues between the parties all in favour of the wife, although it was “only a partial defeat” on one of them. In the latest hearing, he awarded the husband £325,000 to meet his needs for an income and a further £10,000 for a replacement car.

The judge said the reason the case did not settle was because of the way that the husband chose to run it.

“On any proper presentation of the case, this would have been a straightforward needs case and, even with the expense of top firms of solicitors, should not have cost each side more than £100,000. I accept that there might have been an additional issue which would have needed to be resolved about quite what the relationship between the parties was between 2011 and 2016. But I cannot see how this would have increased the costs by more than about another £50,000 a side.”

Cohen J highlighted the emphasis put on the conduct of the litigation in Family Procedure Rule 28.3(7) and an amendment last year to Practice Direction 28A, which followed the Family Procedure Rule Committee costs working group finding that “little positive guidance [in it] to assist the parties to understand the likely costs consequences of failing to litigate sensibly and failing to engage in sensible negotiations and/or of making an open proposal which is significantly higher or lower than the award ultimately made by the court”.

Cohen J continued: “It is self-evident that the payment of something in the region of £1.25m worth of costs between the parties is grossly disproportionate to what was in issue. I find that the wife’s offer was light, but I am in no doubt that, if there had been a sensible (or any) response, there would have been a quick resolution of this case. This case has been conducted by the husband in a manner that I find to be irresponsible and unreasonable. The wife does not seek her costs from the husband. However, I see no reason why he should expect the wife to pay his costs unreasonably incurred.”

The judged capped his liability to her costs at £150,000, a figure almost identical to what his costs were when the wife made her open offer in June 2018.

“Whatever the husband’s difficulties are, and I accept that he does have difficulties, they are not to be funded by the wife. The wife has paid £236,000 towards the husband’s costs. Inclusive of costs of £150,000, the award that the husband receives in total will be £485,000. I would want to hear submissions as to how that is appropriated between the charge which the husband entered into and payment of capital.

“It will, of course, leave the husband in debt to his solicitors with a substantial sum owing to them. That is a matter between him and them. But, in my judgment, it is not for the wife to bankroll this litigation which I find to have been unreasonably conducted by the husband.”

P Mitchell (instructed by Vardags Solicitors) appeared on behalf of the applicant husband. N Cusworth QC (instructed by Payne Hicks Beach) appeared on behalf of the respondent wife.

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Costs News
Published date
30 Jan 2020

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