Monday, March 10, 2014

Rubin v Rubin: The principles applicable to LSPOs

Mr Justice Mostyn
A 'quick and dirty' look at Rubin v Rubin [2014] EWHC 611 (Fam), in which Mr Justice Mostyn set out the principles applicable to applications for legal services payment orders ('LSPOs'), pursuant to s.22ZA MCA, inserted by s.49 LASPO.

The case concerned 3 applications:

i) An application by the wife for an LSPO in the sum of £7,268 to cover costs incurred in financial remedy proceedings.

ii) An application by the wife for an order for a lump sum pursuant to s15 and Schedule 1 para 1(2)(c) Children Act 1989 of £15,700 to cover costs incurred in proceedings under the Hague Convention.

iii) An application by the husband for an order granting permission to appeal an order of Deputy District Judge Elliot dated 28 February 2014, whereby he excepted from a stay which he granted of the wife's divorce proceedings her application for the LSPO.

Briefly, the husband is American and the wife English. There are 2 children. The family had been living in California. The wife wrongfully retained the children in this country and was ordered to return them. The wife started divorce proceedings in England and applied for financial remedies; the husband commenced divorce proceedings in California.

The wife applied for an LSPO to cover costs incurred in the financial remedy proceedings.

The husband applied for the wife's divorce proceedings to be stayed pursuant to Schedule 1 para 9 of the Domicile and Matrimonial Proceedings Act 1973. This application went before Deputy District Judge Elliot on 28 February 2014, when he made an order staying the wife's petition, but excepting the wife's application for an LSPO from the stay. The husband sought to appeal against this order.

The wife also sought to recover her outstanding costs in the Hague Convention proceedings by means of a lump sum under s15 and Schedule 1 para 1(2)(c) Children Act 1989.

Hearing the applications, Mr Justice Mostyn summarised the principles applicable to applications for LSPOs. I will not set out his summary in full here - it can be found at paragraph 13 of his judgment - but will set out his principle (iv):
"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."
Mr Justice Mostyn considered that the same principles should apply, with the necessary modifications, where an order is sought for costs funding in proceedings under Schedule 1 of the Children Act.

Applying those principles he found:
"In both applications the wife seeks to recover costs which have already been incurred in circumstances where there will be no further substantive litigation here whether about the children or about money. In my judgment in both applications she falls foul of principle (iv). This is not a case where her lawyers are saying that they will down tools unless they are paid outstanding costs as well as being funded for the future."
As to the husband's appeal, he found that the application for an LSPO depended upon the main suit. Accordingly, Deputy District Judge Elliot had no power to except the application for a LSPO from the stay. He therefore granted the husband permission to appeal and allowed the appeal.

As to the wife's applications, these were "fatally flawed and meritless" and were therefore dismissed.

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