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Judge criticises ‘tragedy’ of costs in financial disputes

The number of financial disputes which run up disproportionate legal costs is a “tragedy”, a High Court judge has declared.

In a recent judgment, Mr Justice Holman said that it was far too common to see “litigants spending completely disproportionate amounts of money on purely financial litigation”.

He added that disputes over children – such as where they will live or how much contact each parents can have with them – had “very high issues at stake which cannot readily be measured in terms of pounds or Euros”. However, when the dispute is purely financial, spending large amounts of money on litigation is a “waste and folly”, he said.

The judge made these remarks following a financial dispute between the French parents of a three year-old boy. The mother and child lived in Paris, while the father lived in London. He claimed that the amount of child maintenance he had been required to pay by a French court was too much for him to afford.

He characterised the amount of time and money the parties had spent on the case as “mind-boggling”. The judge noted that the case was originally scheduled to be heard in 30 minutes, but “occupied the entire day for the parties and much of the day for me”.

Mr Justice Holman ruled that he could not “do any sort of rough justice today with regard to the costs” so he ordered that the case be listed for a final hearing at a later date. In the meantime, he urged the former couple “in the strongest possible terms to cease this bitter and costs disproportionate conflict” and come to an agreement which was acceptable to both parties.

To read the judgment, click here.

The blog team at Stowe is a group of writers based across our family law offices who share their advice on the wellbeing and emotional aspects of divorce or separation from personal experience. As well as pieces from our family law solicitors, guest contributors also regularly contribute to share their knowledge.

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  1. Andrew says:

    Does anyone know why Calderbank was stopped? There is NO better deterrent to excessive greed or excessive parsimony!

    • Marilyn Stowe says:

      Dear Andrew
      I do. The argument ran that a costs order could completely unbalance an award. A Judge would decide what was fair and having done that would then have to award costs if the offer was beaten. This could leave “the losing” parties in dire straits. If costs were all taken into account together off the top slice then it left the rest for fairer division.
      However it doesn’t always work that way as we’ve seen time and again. If there is no costs risk wealthier parties can litigate with impunity and use their financial muscle to force the poorer party into an unfair outcome.
      Costs can still theoretically be awarded but in reality it’s very rare.

      • Andrew says:

        Woolly-minded thinking. A claimant in a p.i. case who will need help until death supervenes can lose a slice of the damages after guessing wrong about the offer – and there is no imbalance of power like that between individual and insurance company – but divorce litigants cannot protect themselves against the unrealistic greed or parsimony of their opponents.
        Yes, Calderbank could work rough justice if the judge makes an order which just keeps a roof over the heads of the ex-wife and children and then learns finds that the husband offered better – which by definition would have had the same effect only more so. The children need protection in such a case: not so the wife who would be to blame for litigating à l’outrance. The remedy would be to postpone enforcing the order until the children were of full age – on Mesher terms and with the same penal rate of interest (10% above base) as in the CPR.
        Would that not meet the case and if not why not?

    • Nordic says:

      Calderbank is definitely not the answer. The excessive greed and parsimony so frequently on display in our court rooms is, more often than not I suspect, a result of hurt feelings and emotional distress. People who need medical or psychological help are instead given legal “help”, pushed into a brutal court sanctioned boxing ring and encouraged to “fight their corner”.
      Any system that genuinely sought to limit to both financial and emotional damage to the parties and, not least, their children, would seek to protect families from themselves during the emotional turmoil of a divorce. Instead, our family law system seems designed to financially exploit families misery. The notion that this system places the child as the paramount consideration is laughable.
      The answer is a legally binding regime for asset division, which applies to all couples which do not have a prenuptial. This default prenup should of course be based on equal division of the wealth the couple created together while married. No ifs, no buts, no legal fights, no courts.
      Such regimes can be studied all around us, in jurisdictions which often deliver vastly superior post-divorce outcomes. In the Nordics only a couple of percent of children loose contact with a parent post-divorce. If you think the comparable horrific frequency of such outcomes in this jurisdiction have nothing to do with the brutality of our financial “relief” process, you are badly mistaken.

  2. Nordic says:

    It never ceases to amaze me how family law judges deflect the blame for the disasters they themselves preside over, to the very people the family law system supposedly is meant to help and protect.
    This disaster could not happen in France, it could not happen in Germany, in Norway, in Denmark, Sweden, Finland and so on. These countries have law which governs asset division, law which allows people to know what they commit to when they marry and know it will bind them on divorce, removing the need for any court involvement.
    These tragedies happen here all the time because we have no law. When families are breaking up and the parties at their most vulnerable, we throw them into a legal vacuum, equip them with separate lawyers who then go about creating conflicts of intersts between mums and dads. As judges sit and fiddle with the percentages, Rome burns and the family’s wealth is exploited in a meaningless nil-sum game. A game which often instigates life-long acrimony in which the tragedy of costs is dwarfed by the accompannying emotional and human trauma.
    And what do the judges who preside over these disasters do? Do they propose law to stop unnecessary and damaging litigation? Do they accept any incursion into their precious discretion which yield judges power as were they kings in a medieval court (but creates unlimited uncertainty for everybody else)? Do they acknowledge how the system casts mums and dads as opposing combatants from day one? Oh no. They throw their hands up in mock despair and blame the parties. Not our fault Guv.
    I guess it is more comfortable than having a proper look in the mirror.

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