Wednesday, March 06, 2013

TF v FF: Discouraging profligate waste of costs

Mr Justice Jackson
As Mr Justice Jackson said when he began his brief judgment, his decision in TF v FF [2013] EWHC 390 (Fam) contains a somewhat novel element.

It should have been a fairly run-of-the-mill financial remedy case involving modest assets. However, those assets were made substantially more modest by the parties' legal costs, which totalled over £150,000 at the time of the final hearing, the husband having spent £93,000 and the wife £60,000. This "reflected a large number of attritional interlocutory hearings", for which the judge held the wife largely responsible.

In fact, the judge found the wife's litigation conduct inequitable to disregard, and allowed the husband to draw his higher legal costs from the common pool while requiring the wife's lower costs to be assessed before they were taken into account.

I don't need to go into the detail of what was ordered, or of the wife's application for permission to appeal, save to say that the application was granted, but only in respect of the maintenance element of the order. What was novel was that Mr Justice Jackson attached a condition to the permission that the amount of legal costs that are to be recoverable from the other party in relation to the appeal itself shall not exceed £5000 on either side. He said:
"In my view, the court has a responsibility to discourage profligate waste of costs, particularly in a case with a track record like this. It is a matter for each party to decide what they want to spend, but they cannot expect it to be recoverable if it exceeds that threshold."
This condition was attached despite the fact that the wife had already spent £12,500 on the application, which Mr Justice Jackson described as "a sum that is completely disproportionate to the issues in the case". Accordingly, the wife already had unrecoverable costs, even if she obtains an award of £5000 + VAT at the end of the proceedings, to which Mr Justice Jackson remarked: "If that is what it takes to prevent what the district judge described as a haemorrhaging of money, so be it."

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