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You are here: BAILII >> Databases >> England and Wales Family Court Decisions (High Court Judges) >> Z (Schedule 1: Legal Costs Funding Order; Interim Financial Provision) [2020] EWFC 80 (26 November 2020) URL: https://www.bailii.org/ew/cases/EWFC/HCJ/2020/80.html Cite as: [2021] 1 FCR 719, [2020] EWFC 80, [2020] Costs LR 1793, [2021] 2 FLR 727 |
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SITTING AT THE ROYAL COURTS OF JUSTICE
Strand, London, WC2A 2LL |
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B e f o r e :
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Applicant |
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Y |
Respondent |
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Re Z (Schedule 1: Legal Costs Funding Order; Interim Financial Provision) |
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Alexis Campbell QC (instructed by Mills & Reeve LLP) for the Respondent
Hearing dates: 12 November 2020
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Crown Copyright ©
The Honourable Mr Justice Cobb:
i) A legal costs funding order in relation to Schedule 1 and section 8 CA 1989 proceedings;
ii) Interim financial provision for Zoe (Schedule 1, para.1(3) CA 1989).
For the purposes of this determination, the parties have filed statements of evidence, and I have received helpful submissions from leading counsel. I have heard no oral evidence.
Background
"I had to make the agonising decision to return to England where I feel safe and have emotional support from my family.
… both yourself and my family in England are super important to me. At this present time, I need them as much as I need you. I know that you have offered me the most wonderful financial help (night nurse, full time nanny, a safe and beautiful home and so much more) which I am so grateful for and realise how important that all is (thank you). Right now, more importantly I need the emotional support of both you and my family.
… I need to be nurtured and supported emotionally and physically by my family. [Zoe] needs this too. I am devastated about our romantic relationship ending and for this reason need my family around me".
The mother returned to the North East of England, to the home of her father and stepmother, where she is indeed currently still living.
"If you agree to move to the US, then I will bend over backwards to be beyond generous in the future... If you accept my offer, and avoid the prolonged and expensive legal battle, we can move on depositing the money. Any challenge to the jurisdiction will start a legal fight and dissolve the offer".
The mother's case
Legal costs
i) Outstanding and unmet legal costs incurred with firms who are either no longer actively instructed here and in the United States, or whose work is paused pending this litigation: £71,219[3];
ii) Legal costs already incurred with her current solicitors, Hunters: £86,434 as at the date of the hearing[4]; it is notable that £41,400 in costs was incurred in a three-week period before Zoe was born;
iii) Ongoing/future legal costs provision
a) in relation to Schedule 1 proceedings, the sum of £94,878 up to Financial Dispute Resolution Appointment ('FDR'); and
b) in relation to section 8 CA 1989 issues, the sum of £94,806
up to any Dispute Resolution Appointment ('DRA');
instructing her chosen firm, Hunters, and retained counsel;
Interim financial support
iv) Costs of setting up a home for Zoe in England; assessed at
a) £78,000 for furniture, desktop computer, appliances, relocation and setting up costs;
b) £19,500 rental deposit on the new home for Zoe and the mother;
v) Interim maintenance at the rate of £31,396 per month.
i) $30,000 (said to be c.£22,400[5]) which, I was advised, had been paid to the mother in two or three instalments[6]; this sum will apparently largely be applied to discharging a debt to the mother's own father (who had himself discharged a debt to a lawyer in State A) from whom she had borrowed money;
ii) A further sum of £22,400 which the father has recently paid to settle an invoice at Hunters together with a fee incurred by the instruction of counsel; this sum is reflected on the Form H.
The father's case
i) Legal costs incurred with firms no longer actively instructed both here and in the United States; the father observes that the mother has used at least $10,000 which he had provided for her birthing arrangements to defray legal costs, and makes no offer;
ii) Legal costs already incurred with current solicitors, Hunters; the father has paid £22,400 and makes no further offer;
iii) Ongoing/future legal costs provision in relation to Schedule 1 and section 8 CA 1989 issues; the father offers £10,000 per month;
iv) Costs of setting up a home in England; the father offers nothing;
v) Interim maintenance: the father offers £10,000 per month.
Discussion (1): Legal Costs Funding Order; incurred costs
"The court cannot make an order unless it is satisfied that without the payment the applicant would not reasonably be able to obtain appropriate legal services for the proceedings. Therefore, the exercise essentially looks to the future. It is important that the jurisdiction is not used to outflank or supplant the powers and principles governing an award of costs in CPR Part 44. It is not a surrogate inter partes costs jurisdiction. Thus a LSPO should only be awarded to cover historic unpaid costs where the court is satisfied that without such a payment the applicant will not reasonably be able to obtain in the future appropriate legal services for the proceedings". (emphasis by underlining added).
"My concern is to ensure that the mother and father have equality of arms, and equal access to justice in this case. I do not, as Mr. Turner sought to persuade me, treat equality of arms as "equality of payments" – a suggestion that, £ for £, the father should ensure that the mother is more or less equally provided for in relation to her costs as he is. However, for as long as any client has incurred significant outstanding legal costs with his or her solicitor, there is no doubt but that they become bound ("beholden" per Mr. Harker, see [9] above) to each other by the debt; this may well impact on the freedom of, and relative strengths within, their professional relationship. Further, the solicitor may feel constrained in taking what may be important steps in relation, for instance, to discovery, or in relation to exploring parallel non-court dispute resolution. The debt may materially influence the client's stance on possible settlement, and the solicitor's advice in relation to the same: a client – without independent resources – is in a vulnerable position, and may be more inclined to accept a settlement that is less than fair simply because of the concerns about litigation debt. This would not be in the interests of this, or any, child in Schedule 1 proceedings. A level playing field may not be achieved where, on the one side, the solicitor and client are 'beholden' to each other by significant debt, whereas on the other there is an abundance of litigation funding. Though there is an increasingly familiar and commendable practice of lawyers acting pro bono in cases before the family courts, particularly where public funding provision previously available has been withdrawn, legal service providers, including solicitors and barristers, are not charities, nor are they credit-agents. It is neither fair nor reasonable to expect solicitors and the bar to offer unsecured interest-free credit in order to undertake their work; there is indeed a solid reason for lawyers not to have a financial interest in the outcome of family law litigation".
"[24] In Rubin, Mostyn J was not considering legal costs funding in ongoing proceedings; he was dealing with truly 'historic' costs which had arisen in two separate sets of proceedings (i.e. divorce and child abduction), which had, importantly, concluded. The financial proceedings had been stayed (proceedings were now ongoing in California), and the mother and children had returned to California, pursuant to orders made by Hogg J under the Hague Convention 1980. There was, as Mostyn J observed, no further litigation in this country, and no litigation in prospect. I consider that Mostyn J was right to reject a legal costs funding application as a vehicle to recoup the costs of either or both of these concluded claims. But that type of application is distinguishable from the type of situation here, where the legal costs funding claim arises in relation to costs reasonably and legitimately incurred within ongoing proceedings prior to the determination of the legal costs funding application."
"[26] I would not regard it as necessary for an applicant to demonstrate that his or her solicitor has actually 'downed tools' or will do so before he or she could legitimately make an application for a legal costs funding order where 'historic' costs have been incurred. Such an approach could be problematic. I agree with the essence of Mostyn J's approach – namely that a clear case would need to be shown that the solicitors are reaching the end of their tolerance – but the approach described in [16] of Rubin ought not to be applied too strictly, otherwise it would work materially to the disadvantage of the honourable solicitor who is prepared to soldier on (perhaps somewhat against their better commercial judgment) for the good of the client or the case."
"I hope that at the cost allowance hearing, an order will be made that [the father] pays you a sum of money to settle this invoice, and any further invoice we raise between now and the costs allowance hearing. If this is not the case, we will not be able to do any further work for you unless you are able to raise money elsewhere to fund our fees. I appreciate that this is extremely unlikely. If the funding application is successful, this firm will be prepared to represent you and carry out work on your behalf, but only to the extent that the ordered costs funding meets our fees".
Discussion (2): Legal Costs allowance; Future costs
i) The mother has indicated her willingness to correct the birth certificate to reflect the parentage of the father;
ii) Any dispute over Zoe's surname appears now to have narrowed to a question over the insertion of a hyphen between the surnames of the mother and father; I trust that with good sense this will not be litigated;
iii) The mother is apparently keen to facilitate contact between Zoe and her father here and in the USA. Even if the precise arrangements cannot be agreed, I would very much hope that this can be satisfactorily resolved by the parties through mediation, and/or with the assistance of lawyers; there is no apparent justiciable issue, or issue of principle, at stake in this regard.
I note that the father offered some time ago - on 9 October – to engage in mediation in relation to the full range of issues; he also offered to pay the mediator's fees and provide the mother with some upfront legal fees for her 'representation' at mediation. The mother has apparently declined this.
Discussion (3): Costs of setting up a home for Zoe in England;
Discussion (4): Interim financial provision for Zoe
[49] "… the carer must have control of a budget that reflects her position and the position of the father, both social and financial. On the one hand she should not be burdened with unnecessary financial anxiety or have to resort to parsimony when the other parent chooses to live lavishly. On the other hand whatever is provided is there to be spent at the expiration of the year for which it is provided. There can be no slack to enable the recipient to fund a pension or an endowment policy or otherwise to put money away for a rainy day".
Bodey J, sitting as an additional judge of the Court of Appeal, in the same case said this:
[77] "In considering the mother's budget, at least in bigger money cases, the court should paint with a broad brush, not getting bogged down in detailed analyses and categorisations of specific items making up opposing budgetary presentations. Rather, the court should do its best to achieve a fair and realistic outcome by the application of broad common sense to the overall circumstances of the particular case".
"… £1,000 per month will buy only one or two items of clothing [for Zoe] each month. [Zoe] will not be able to be dressed in lovely quality clothing for £1,000 per month".
This was all consistent with her proposal that she should live at one of the most exclusive addresses in the whole of London, and drive a high-performance car to take Zoe to 'appointments and do the groceries' (see below).
i) £4,750 for rent (from 1 January 2021);
ii) £9,600pcm for other expenses with effect from January 2021. Without descending any further into the detail of the assessment I can indicate my overall conclusions comparable with the claim and the response, as follows:
Item Mother's claim Father's proposal Allowed 1 Housing (other than rent) 940 770 800
2 Food & household 1550 1050 1450 3 Clothes & footwear 2500 1000 1000 4 Other expenses 192 192 192 5 Domestic help (other than nanny) 2,200 1,200 1,200 6 Car 1,963 0 1,200 7 Personal expenditure 2,600 1,150 1,250 8 Entertainment, hobbies etc 3,020 2,520 2,520 Total 14,965 7,882 9,612
iii) The mother accepts that for the months of November and December 2020, while she continues to reside with her family, she has no accommodation or domestic help costs ([1] and [5] above), and lower miscellaneous, car and entertainment costs ([4], [6] and [8] above). Therefore, for these two months, there will of course be no provision for rent, and I shall fix the allowance at £5,600;
iv) A further £5,600pcm for the nanny (this expense reduces to £4,000 from mid-February 2021, and the interim provision shall reduce accordingly).
Order
i) Legal costs incurred with firms no longer actively instructed, or whose work is paused, both here and in the United States; I propose to make no award
ii) Legal costs already incurred with current solicitors, Hunters; £60,504 this shall be paid by 10 December 2020;
iii) Ongoing/future legal costs provision in relation to Schedule 1 and section 8 CA 1989 issues with Hunters, and counsel; £90,000 this shall be paid at the rate of £15,000 per month over the next six months;
Interim financial support
iv) Costs of setting up a home for Zoe in England: I propose to allow the mother the sum of £70,000 (see [40] above). I propose to allow her up to £15,000 for a deposit on a rented flat (see [41] above); the deposit will be payable by the father directly to the lessor of the property.
v) Interim maintenance; I propose to allow her the following:
Until 1 January 2021:
a) Nanny: £5,600 (see [49] above);
b) Other expenses: £5,600 (see [51](iii) above);
From 1 January 2021:
c) Rent: £4,750 pcm (see [48] and [51](i) above);
d) Nanny: £5,600 until mid-February, and then reducing to £4,000 to reflect her shorter hours (see [49] above);
e) Other expenses (as per the table at [51](ii) above): £9,612 pcm.
These sums shall be paid monthly in advance by standing order on the first day of each month. Appropriate credits should be given for any payments made for November.
Note 1 Zoe is not her real name. [Back] Note 2 Correspondence: 29.10.20 [Back] Note 3 £54,439 to the English lawyers, £14,639 to the US lawyers in State B, and £2,141 to the US lawyers in State A. [Back] Note 4 I am advised that this includes the solicitor costs and counsel’s fees for the hearing on 12 November 2020 [Back] Note 5 At the exchange rate in force at the date of the conversion; [Back] Note 6 This figure is taken from the mother’s last statement; I believe that this is made up of $20,000 received on 30 September; ($10,000 for birth expenses, and $10,000 allowance for October’s allowance) together with $10,000 for November’s allowance. [Back]