When divorce costs spiral, where does the responsibility lie?

Divorce|February 4th 2011

divorce costsIt was with some personal discomfort that I read the quotation from a recent article of mine in Family Law, as cited by Lord Justice Wilson in the appeal before the Court of Appeal of Jones v Jones.  Of course the compliments of a Lord Justice of Appeal, which accompanied the quotation, are normally to be welcomed – if only because they are few and far between for the practitioner.

However when I wrote my article on the observations by Mr Justice Charles in Jones v Jones of the many ancillary relief issues, which are still at large in this area of the law, I did so with the intention that the judgment – while a difficult case for any busy lawyer to disseminate because of its substantial length – should nevertheless be made more accessible and understandable, if only by summary, because of the importance of many of the views expressed by this senior family law judge.

Of course the Court of Appeal has, not for the first time, emphasised that long judgments can be counterproductive for other reasons. Not least of these can be the additional costs occasioned thereby upon an appeal, which has to grapple with the many issues covered, most of which may not have been central to the decision under appeal before the Court.

As Marilyn recently pointed out in her post about Jones v Jones, the criticism of the Court of Appeal about the costs incurred (in the Jones case it was £1.7 million), in the pursuit of the “fair” judgment concerning the division upon divorce of the parties resources, has been a constant theme of judges at all levels for a number of years.

Within the profession, it is often privately observed that there is a feeling of hypocrisy engendered by such remarks, sometimes from senior judiciary whose own, often illustrious careers, attracted in fees no little financial reward themselves.

Indeed, once when in the company at lunch of a very eminent judge, I was obliged to enquire, when he made similar observations about the profession’s fees, whether I was right that he had previously appeared as counsel in certain well known “big money” cases and whether he had complained that his fees had been too high at the time. To be fair, he replied that he accepted his comments may be seen as somewhat hypocritical. This was at least a relief for my colleague, who was sitting between us and who appeared to be having, at this point, “severe indigestion” over his salad – or was he trying really to hide beneath those lettuce leaves?

Section 25

The elephant in the room in all of these debates is, I would suggest, the system itself and, in particular, the statutory divorce provision, section 25 of the Matrimonial Causes Act 1973.

Yes, the section in its language has been able to envelop nearly 40 years of change in a society which has moved from observing divorce as an admission of failure to, for some, a lifestyle badge or a ticked box. Indeed, it has remained able to take account of the increasing recognition of ante-nuptial agreements without urgent amendment being required.

However in reality, the section contains one of the widest discretionary exercises known to our law and requires divorcing couples not only to seek legal advice to explain the court’s approach under the statute. In many cases, it forces the parties with such advice to disagree as to the likely outcome of a trial on the issues between them.

Can it be right that the man and woman in the street, when reading section 25, will gain only a superficial understanding as to how the court is likely, eventually, to determine their resources distribution on divorce ? Is it fair that in any Court Centre up and down the land, the best that can be said to clients is that Judge A or Judge B could come to different conclusions about various fundamental issues, but that they, as clients, should rest assured that whichever judge determines their case, his or her decision will remain within a band of reasonable outcomes which either judge would have hit upon?

Of course, as practitioners, many of us have known for years that there has been a void in the system in certain areas of the country of an effective appeal route when the district judge has, in the decision reached, stepped outside that reasonable band of decisions that should have been made. Hopefully in this regard, the “Money Judge” scheme being tried on the Northern Circuit will finally address this problem and ensure that at the Circuit level, there are judges available with the required “recent experience” of ancillary relief work as practitioners. They can confidently take some of the heavier ancillary relief cases at first instance and a regular diet of appeals from district judge decisions, without the client having to incur the costs of appeal to the higher courts or having to just bite the bullet of a bad decision.

Returning to the theme of the costs from the lay client’s point of view…

Why cannot he or she understand the law on divorce by reading the section alone? Why does the client have to obtain legal advice for an explanation? Why can there not be a presumption (see the Court of Appeal’s comments in Charman v Charman (2007) EWCA Civ 503) within the section as to the division of resources between the parties when there has been a marital breakdown? Is it really acceptable that it has been the position to date, by the process of case law precedent and not by statute, that rich people’s divorces shape the principles of the ordinary man and woman’s rights upon divorce? Indeed, is it acceptable that the wealthy have to fund the progression of our divorce law principles in the first place!

Like Lord Justice Wilson in Jones v Jones, I agree that the law may not be as complex as a first reading of Mr Justice Charles’ long judgment would indicate. Nevertheless, nor is the law in this area as uncomplicated as Lord Justice Wilson suggests. The fact is that the law of divorce resource distribution is not simple enough at its core, namely at the point of section 25 which, we are repeatedly reminded, is the source of every judicial journey when dividing divorce assets and incomes.

Furthermore there is now – with the absence of any Calderbank procedure of “without prejudice” offers, which can later be produced to the court or some other like procedure – no real incentive for the parties to present before any contest other than their respective “best case scenarios” under the “open offer” requirement at the 14 day and 7 day points before the trial.

What increased costs are thrown away by this inherent lack of incentive in the present system? Surely, it is time for any such required “open offers” to be moved from their present timing to no later than 14 days after the Financial Dispute Resolution hearing. It is also time for any final contest judge to be able to consider the reasonableness of such “open offers” in any costs order application made after judgment has finally been given.

Divorce costs are rising

Certainly, my own experience in everyday practice has been that divorce costs are increasing and, in certain cases, have indeed got out of control. In addition, there remains a lack of appetite at times for the court itself to enforce its own direction orders. Time frames ordered are slipping without a costs penalty. There also appear to be a greater number of cases which are contested to a final hearing than previously. These factors, if not just local but reflected across the country, may well indicate that a more “root and branch” reform of our law on divorce is now required.

The client is entitled upon divorce not only to a fair outcome, but also a fair system which gets him or her to the judgment seat and a better assurance that, should the case be contested, the “fair” outcome is not just in the eye of the particular judge who beholds it. Let the client have, from the statute itself, some better clarity of what he or she is getting into, the likely outcome of the process and the confidence that if the other spouse acts capriciously, there are effective money penalties that will bite.

When the Court of Appeal points the finger at the practitioner or the judge at first instance about the costs position on divorce, as it has now developed, it should take a moment to reflect that there will be three other fingers of that same hand pointing back in its direction!

ashley murray

Ashley Murray is Barrister-at-Law at Oriel Chambers in Liverpool. One of the limited number of senior circuit specialists outside London with a recognised big money ancillary relief practice, he is known for his knowledge and ability in this area of the law.

Author: Stowe Family Law

Comments(7)

  1. JamesB says:

    If we are doing rhetorical questions like, is it right? is it fair, then I have one.

    Does it matter?

  2. Marilyn Stowe says:

    James
    It does matter. Compare the current contrast in costs rules in the different civil divisions. In one, conditional fee agreements rule. Lawyers can take on winnable cases and if predictably successful can double their already high level of costs. Even if the case is less certain the threat of paying obscene amounts of costs can deter the other side irrespective of the justice of the case. It hands power to the financially stronger party with the CFA.
    Compare and contrast the equally worrying position in family law.
    In family law the no order principle applies. This means the risk is minimal and a determined litigant can plough on to financially outgun the opposition forcing the weaker party into an unfair deal or take a chance on the basis he or she can’t do worse and may do better.
    In both cases it can seriously destabilise the outcome.
    So I think it does matter and although we seem to be enshrining and entrenching the no order principle in family law, as it isn’t working perhaps this needs reconsideration.
    Regards
    Marilyn

  3. Portia says:

    it is crystal clear that the legal system is mainly to do with money.

    Lady Justice- weep for those dressed in wigs and curls have lost the meaning of what you represent as they pass through the doors of RCJ and fail to look up.

    Hidden around the corner is the real Lady Justice with her sword bringing Justice down, bringing peace.

  4. JamesB says:

    I just think fewer people will get married as the courts lack credibility. I think the only way back for them is for them to take back the work from the CSA. Not sure what they are good for now, and by ‘they’, I mean the divorce courts, and indeed the marriage certificate. That is the point I was trying to make and that marriage looks less than likely for my children (or re-marriage for me) at present. Most people aren’t (and rising).

  5. JamesB says:

    http://www.statistics.gov.uk/cci/nugget.asp?id=322

    p.s. I am with Princes Harry and Andrew on this, rather than Princes William and Charles. They seem happier not being married.

    I don’t think the Royal Wedding next Year will be that influential either. Not with Andrew and Harry and Ann and most of the UK population voting with their feet.

  6. JamesB says:

    Yes Portia, I agree with you.

  7. Carnival of Wealth #25 – Valentines Edition — Personal Dividends - Money+Lifestyle says:

    […] saying, “The title says it all! Don’t get into debt!”Stowe Family Law presents When divorce costs spiral, where does the responsibility lie? By guest blogger Ashley Murray posted at Marilyn Stowe Family Law and Divorce Blog, saying, “Hi, This is a post relating to […]

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