4: Keeping litigation costs in check – the Court bites back!
Over the years various judges have mildly criticised solicitors and their clients for their approach to matrimonial litigation but in two recent cases, two different judges have ‘let rip with both barrels’ about the huge legal costs often associated with financial litigation following a relationship breakdown.
GUIDELINES FOR MATRIMONIAL LITIGATION
A basic principle is that any judge who hears a case should only be presented with one bundle of documents containing less than 350 pages in total. Mr Justice Holman was presented with approximately 3,500. His response was to send both clients and their legal teams away to substantially thin the documentation to be considered, at the same time encouraging them to try and negotiate a settlement, which they did.
Mr Justice Holman clearly intended to convey the message that unnecessary time was being spent in court. He referred to the need for family judges to also deal with an enormous number of very difficult family cases involving the future of vulnerable children, and the care and treatment of sick people, including mentally incapacitated people, stating that it was not tolerable to allow people in the same financial position as the infamous Sandra Seagrove and Larry Sullivan (whose case it was) to use up eight days of court time and, in the process rack up legal fees totalling £1.3 million over a £500,000 dispute.
Clear guidelines have now been issued to any family lawyer preparing for a hearing. These are intended to ensure, amongst other things, that cases are dealt with in a proportionate manner and do not utilise too much court time, therefore reducing legal costs during a difficult and stressful period for couples involved.
LITIGATION OR ARBITRATION?
In another case heard at the beginning of November 2014, Mr Justice Mostyn had commented, when referring to a practice of trying to circumvent or bend the rules.
“It must never happen again. If this requires a culture change in the way practices are run then so be it.”
Mr Justice Holman reinforced the view that couples involved in financial cases could often be better served by using a process of private arbitration. Within that process the parties could agree to refer to many more documents if that is what they wanted to do.
Private arbitration involves the couple agreeing to enter into an arrangement whereby their case is presented to an experienced lawyer, possibly even a retired Judge, and for that person to make a decision which is binding on the parties. Both can agree the identity of the arbitrator and have greater control over the material to be considered, both written and verbal.
Arbitration bears some similarities to the court process but there are two important differences:
- It may be possible to get the dispute heard much quicker than going through the courts
- The process can be more flexible and may be cheaper – although the parties do need to pay for the arbitrator’s time
17 December 2014