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Court Despair Over Costs
When positions in a family break-up become so entrenched that even the most basic issues are disputed all the way to the court, the result can be legal costs which drive a judge ‘to despair’.
Proceedings to determine the financial settlement on the divorce of a couple worth nearly £50 million have already led to more than £700,000 in legal costs before the arguments on valuations and so on have even started.
The husband had been physically and mentally unwell and, as he was unable to conduct litigation himself, his wife requested that the Official Solicitor be appointed to act on his behalf. However, the family solicitor put himself forward to act as his ‘litigation friend’ and was appointed by the court.
At the time, the wife accepted the solicitor’s appointment. Six months later, however, she raised an objection, claiming that he was ‘too close’ to some of the family’s past decisions as he had acted for various family members over the years.
The parties had already spent £700,000 arguing about a ‘preliminary issue’ relating to whether or not shares in the family company held in the names of both the husband and wife were held in trust for their son. This matter was listed for hearing.
The wife’s disquiet as to the involvement of the family solicitor was increased when another partner in the same firm was instructed to act for the couple’s son when he ‘intervened’ in the proceedings because of his financial interest in the outcome. She therefore raised her concern over the continued appointment of the solicitor in an application to the court.
When the application came to be heard, the judge declined to deal with it because of the considerable delay in raising the objection and because there was insufficient time to consider the evidence in the case (he had been presented the day before with a bundle of documents extending to ‘many hundreds of pages’) and the issues were not ‘ABC law’. The matter was therefore adjourned.
It is surprising that an issue which is potentially so simple (whether or not a trust exists and, if so, whether shares are in it or not) should be so difficult to resolve. The consequence has been that deep inroads have already been made into the family wealth without a resolution of any substantive issues.