Category: Comment

What’s the longest you’ve ever waited at court for a party to make an offer at an FDR? Two hours? Three?

How many times have you sat in a conference room, running out of small talk, snatching glances at a clock that never tells the right time? Your side waits patiently for the other side to respond to the indication, only to find out that in an identical room in another part of the court building (remember those?) they were waiting for you to make the first move? Or that they’d actually gone home half an hour ago.

It sometimes feels strange that in a field of law which so underlines the importance of negotiated settlement, which invented the FDR (and subsequently the VIP area that is the private FDR), that when it comes to negotiation, we’re basically all – solicitors and barristers – amateurs.

Which isn’t to say that we can’t negotiate. You can’t be a successful financial remedy practitioner without being able to negotiate competently. Some people have a preternatural instinct for pitching an offer in exactly the right spot (the Goldilocks instinct, or what Sir Geoffrey Boycott would call the corridor of uncertainty). But if you asked what is their negotiating strategy, or what negotiating tactics have they used, you’d draw a very blank expression.

Our awareness of negotiating theory is limited to saying things like “I’m not negotiating against myself”, or “I’m not going to let this be a Dutch auction” (I’ve said this several times, hoping my opponent doesn’t ask me to explain what exactly is a Dutch auction). Even complex litigation concludes in the spirit of the souk: “Final offer! This is my final offer! No way can I sell you this carpet for less. I would be stealing bread from my own children’s plate… Ok, ok, we split the difference, yes?”

We negotiate in the same way most people play chess: we know how the pieces move. We know the aim is to capture the other side’s king. We plan maybe one or two moves ahead. But few arrive at court thinking “today I’m going to make the Albin Countergamble”.

Masterclass on Negotiation

It’s difficult at the moment to go online without being bombarded by adverts for MasterClass. This is a subscription site which involves famous film directors, chefs, DJs and interior designers giving bite-sized classes in essential life skills like making a Hollywood film, running a Michelin star restaurant, and getting your dance album to number one. My wife has a subscription. (I’m far, far too cheap to buy one myself). The one class I’ve watched is by Chris Voss, a gravelly voiced former CIA hostage negotiator, who has a twelve part series on negotiation theory.

It’s broken down into short segments with titles that sound like airport novels: “Bargaining”, “Bending Reality”, The Accusation Audit”. I wouldn’t exactly describe the approach as scientific. There are plenty of examples of common sense practices being labelled and packaged and sold to the person gullible enough to be watching (me) or paying (my wife).

But it does remind you that Out There (in the world of commerce) people take this stuff seriously. And sometimes you’ll have a client who comes from that background who will be surprised that you aren’t discussing in conference how you intend to deploy Tactical Empathy (TM) or Mirroring (TM) in the negotiation.

To be honest I don’t yet know if I have benefitted from watching these classes. And to be even more honest I’ve only watched 3 of the 12. (Like most of these things, it’s not that interesting beyond the first fifteen minutes).

My main reaction is a sense of relief that a lot of what’s being discussed is what already takes place (eg finding common goals, not being overly aggressive, not boxing yourself in). If you google studies on negotiation you get pearls of wisdom like “Don’t gloat” (Stanford Business School), which you’d sort of think should be taken as read. So while it can’t hurt to think in terms of negotiation strategy, I’m certainly not saying that we all need to subscribe, or get into using these new terms. After all, a FDR isn’t the same as a classic commercial negotiation: there are effectively three parties and the most important job is persuading the judge, who has no skin in the game. Which skews the application of game theory.

But on reflection I do think there’s something a little quaint about high octane litigation, multi-million pound claims, being resolved in such an unstructured way. Which until recently involved offers being written down in blue books with fountain pens, often in such bad handwriting that it’s sometimes impossible for even the writer to read. Or where particularly grand counsel (you know why you are) rely on pupils as scribes to take a note of the terms.

Admittedly we have all had some perfunctory training in negotiation. But for those who remember Bar School or Law School as being a bit Mickey Mouse when it came to vocational training, negotiation classes were about pure Disney as it got. Perhaps things have improved. Somehow I doubt it.

I think my point is this. As lawyers we operate in a world where the practices of the commercial world rarely intrude. And family law with it’s closed courts and impenetrable discretion is a little like Edo Japan before Commodore Perry arrived in the 1850s: maybe it’s time to think more objectively about what we’re doing when we negotiate – and while there is an understandable reluctance to take seriously pseudo-scientific mumbo jumbo about negotiation, maybe we should at least be open to thinking about it?

Alexander Chandler

23 July 2020

Family Procedure (Amendment) Rules 2020 (SI 2020/135)

This post covers two points (1) the new rules on open proposals and costs estimates, which took effect on 6 July 2020, and (2) are these likely to actually work?

THE NEW RULES

The amendments were announced on 10 February 2020 which, it is astonishing to realise, was only five months ago. The commencement date for most of the changes was 6 April 2020, save for four adjustments of the Part 9 financial remedy rules, which come into effect on 6 July; two are covered in this note.

The first major change is the introduction of FPR Pt. 9.27A:

Open Proposals 21 days after FDR (9.27A)

As of 6 July 2020, and following a FDR which doesn’t lead to settlement (or an adjourned FDR), the parties must (unless the court directs otherwise) exchange open proposals within 21 days of the FDR. Accordingly, if an FDR takes place on 27 July 2020 and the court gives directions to a final hearing (but does not deal specifically with open proposals), pursuant to r.9.27A, the parties must exchange open proposals by 17 August 2020.

This will be well in advance of the final hearing and before Section 25 statements have been exchanged.

If this is going to present difficulties in a given case, the parties should seek a direction from the FDR judge, pursuant to r.9.27A(1)(a), providing for different dates.

Alternatively, where there has been no FDR, an open proposal pursuant to r.9.27A(2) should be sent no less than 42 days before the final hearing (unless the court directs otherwise).

In addition to this new rule requiring open proposals shortly after the FDR (9.27A), the parties will also have to comply with FPR 9.28 which requires open proposals 7 or 14 days before the final hearing: Hence, parties who cannot settle face the curious requirement to serve two open proposals between FDR and final hearing.

Costs estimates (9.28)

According to Moore’s Law, computing power (expressed as the number of transistors in each microchip) doubles every two years. While the Family Procedure Rules are not expanding at quite that rate (yet), year on year they steadily increase in size and scope.

The latest change replaces the old FPR 9.27 (130 words) with a new, much more detailed, rule which is over four times as long (over 500 words). Previously the rule directed the parties to file a Form H before every (financial remedy) hearing and a Form H1 14 days before the final hearing.

The new provisions are set out below. The key differences are

(1) at First Appointment an estimate of costs up to FDR should be filed;

(2) at FDR an estimate of costs to final hearing should be filed;

(3) confirmation of service must be lodged,

(4) copies of the schedules ust be brought to court,

(5) the amount of the parties’ costs must be recited to the First Appointment and FDR order on of service must be lodged;

(6) failure to lodge a costs estimate must be recorded on the face of the order and redressed within three days:

“9.27.—(1) Except where paragraph (4) applies, not less than one day before every hearing or appointment, each party must file with the court and serve on each other party an estimate of the costs incurred by that party up to the date of that hearing or appointment.

(2) Not less than one day before the first appointment, each party must file with the court and serve on each other party an estimate of the costs that party expects to incur up to the FDR appointment if a settlement is not reached.

(3) Not less than one day before the FDR appointment, each party must file with the court and serve on each other party an estimate of the costs that party expects to incur up to the final hearing if a settlement is not reached.

(4) Not less than 14 days before the date fixed for the final hearing of an application for a financial remedy, each party (“the filing party”) must (unless the court directs otherwise) file with the court and serve on each other party a statement giving full particulars of all costs in respect of the proceedings which the filing party has incurred or expects to incur, to enable the court to take account of the parties’ liabilities for costs when deciding what order (if any) to make for a financial remedy.

(5) A costs estimate filed and served in accordance with paragraph (1), (2) or (3) and particulars of costs filed and served in accordance with paragraph (4) must include confirmation—

(a)that they have been served on each other party; and

(b)in the case of a party who is legally represented, that they have been discussed with the party on whose behalf they are provided.

(6) Each party must bring to a hearing or appointment a copy of any estimate of costs filed and served in accordance with paragraph (1), (2) or (3) and any particulars of costs filed and served in accordance with paragraph (4).

(7) The amount of—

(a)a costs estimate filed and served in accordance with paragraph (1), (2) or (3); and

(b)particulars of costs filed and served in accordance with paragraph (4),

must be recorded in a recital to the order made at the hearing or appointment before which the estimate or particulars were filed or served.

(8) If a party fails to comply with paragraph (1), (2), (3) or (4)—

(a)this fact must be recorded in a recital to the order made at the hearing or appointment before which the costs estimate or particulars of costs should have been filed and served; and

(b)the court must direct that the relevant costs estimate or particulars of costs must be filed with the court and served on each other party within three days of the hearing or appointment or within such other time period as the court directs.

(Rule 28.3 makes provision for orders for costs in financial remedy proceedings.)

(Practice Direction 9A makes provision for statements of truth to be included in estimates of costs and particulars of costs filed and served in accordance with this rule.)”.

WILL THEY ACTUALLY WORK?

The thinking behind requiring an earlier open proposal is that if parties can make privileged offers at FDR they should be able to make open ones shortly thereafter; and that this will encourage compromise and earlier settlement. The potential sanction for breaching this rule (e.g. failing to make an open proposal post-FDR or making a wholly unreasonable one) is set out at FPR PD28A § 4.4, which defines litigation misconduct which might resound in a costs order under FPR 28.3(6) to include that:

“…[t]he court will take a broad view of conduct for the purposes of this rule and will generally conclude that to refuse openly to negotiate reasonably and responsibly will amount to conduct in respect of which the court will consider making an order for costs.”

As to how this will work in practice, how the requirement for parties to make two open proposals, will bed in, there are grounds to be sceptical.

(1) The existing rule for open proposals (FPR 9.28) makes perfect sense. It obliges the parties to set out what orders they seek 7/14 days before the final hearing, at which stage all the evidence is generally available. Accordingly the proposal will only be open for acceptance for a relatively short time, and it is invaluable to the tribunal to know what each party is seeking in advance of the hearing

(2) The rationale behind having a first open proposal post-FDR, and then a second before a final hearing becomes a bit fuzzy when one considers some practical questions:

• For how long should the first open proposal remain available for acceptance without costs consequences? accepted? If it takes six months from FDR to final hearing (which may become standard post-Covid), can it be accepted two weeks before the final hearing, when the second open proposal is made, which (presumably) has the effect of replacing the first? Or should a first open proposal include a term that once a period for acceptance has passed (eg 21 days) that costs from that date onward would be payable? (cf. CPR Part 36.5)
• Is it acceptable to make the same open proposal twice? Presumably so if the objective here is to encourage earlier open proposals?
• What happens if a party increases his open proposal (from first to second open proposal), to seek a greater share of assets at the final hearing, e.g. to defray his additional legal costs? Is that prima facie unreasonable? Conversely, where a party party reduces his open proposal (to be more generous to the other party), is that a sign of reasonableness and compromise or a tacit admission that the first offer was too low?
• Does litigation misconduct under PD28A § 4.4 mean beating your own open proposal (rare) or soundly beating the other’s proposal (more common)?
• If it’s the latter, to what extent will a court follow the convention that open offers present a court with the two goalposts, rather than spotting where the ball is expected to land? Is it no longer ‘reasonable’ to pitch your open case toward the top or bottom of the bracket?

(3) The answer to the above will presumably be the usual family law fudge (i.e. it depends on the facts of the case). But where an application for costs is pursued based on a first open proposal, on what basis should the judge consider its reasonableness? Logically it could only be tested against:

• The assets and liabilities that existed when the offer was made (and not as they turned out to be at trial)
• The state of the case in terms of disclosure, deficiencies etc.

Does it therefore follow that where a costs argument is likely to be raised based on a post-FDR open proposal, that the parties now have to prepare a second schedules of assets, showing the values at that stage (in addition to the assets at the date of the hearing)?. How, otherwise, is a court meant to gauge the reasonableness of the first open proposal?

(4) What happens where a party follows a FDR (or private FDR) indication to the letter in his first open proposal, and the final hearing judge takes a different view? It seems grossly unfair not to be able to even raise that argument due to the confidentiality of the FDR. Would not at that stage (ie after the court has determined the case) the justification fall away for keeping that indication private, as a shield against a costs argument? Surely it could not be said that following a judge’s indication is ‘unreasonable’ even if the indication got the outcome of the case wrong?

(5) There’s nothing currently preventing a party making an early open proposal now. Indeed, this is smart thinking in many cases. However, the new rules make it obligatory. And why should a party be required to openly make an offer before all of the evidence is in, before updating valuations and addendum expert reports are in. Why must a party take a punt on future developments which may be material, in terms of updating disclosure or reviews into the value of a company? Parties in civil claims aren’t required to make open proposals between the close of pleadings and witness statements. And under the new rule, in many cases parties will be expected to make open proposals before exchange of Section 25 statements, updating information and any updating expert reports;

(6) The effect of the new rule is that parties are required to engage in something like game theory: do I play safe and go high in my first open proposal, even though this may store up trouble for the future (if I’m way off beam at a final hearing, and the other side may opportunistically apply for costs). Or do I pitch low even though this may be under-playing my hand in terms of the litigation and I may settle on the cheap, before further investigations are made.

I’ll make a prediction. This new rules will have the unintended effect of giving parties ammunition to run dubious costs arguments at the end of final hearings.

The problem is uncertainty. The civil costs rules because they are clear and predictable (‘losing party pays the winning party’s costs’). The Calderbank rule, while more complicated, is based on an objective test: have you beaten your own offer?.

The ultimate test in the new rules is ‘reasonableness’, which is sufficiently subjective and broad to arise in many cases. (Or at least it could be arguable at the end of a case, which amounts to the same thing). And this might involve involve a judge who has just handed down judgment on the merits having to wrestle with questions such as: the reasonableness of the offer at the time it was offered? does there need to be a causal link between the unreasonable open offer and the case proceeding to final hearing? will the court have to engage in speculation as to what might have happened if a reasonable offer had been made? If the case was likely to proceed to final hearing in any event, what is the loss and how should a costs order be quantified? Should the court pluck a figure out of the air as a penalty?

The intention behind the new rules is laudable. But the unintended consequence may be quite different: an increased number of costs applications based not on an objective fact (I have beaten my offer) but complicated and subjective submissions as to the reasonableness of historic open proposals.

One suspects the court will be generally inclined to make no order as to costs.

Alexander Chandler

8 July 2020

1. Minimum 40 paragraphs for a First Appointment; 90 for a FDR;

2. Tone should never deviate from rant. Work those adjectives – there is no such thing as delay, only disgraceful delay;

3. Figures on the schedule should read like the bottom line of a sight test: practically invisible to the human eye;

4. When it comes to adding colours, the more the merrier. Make your schedule look like a TV test card;

5. Your client is a modern saint. The other side is engaged in a criminal conspiracy;

6. Always confuse gross and net incomes. Gross for other side: net for your own;

7. Never cite one case when eight will do;

8. Property particulars: out of budget and off the market;

9. Never identity the issue until paragraph 60. Then disguise it;

10. No matter hopeless your case, always threaten costs.

It is a truth universally acknowledged that no financial remedy hearing can properly conclude until one advocate has declaimed “…the wife must cut her coat accordingly”, or how “…sauce for the goose is sauce for the gander”, or “going forward”, the husband “…having made his bed must lie in it”.

In Politics and the English Language (1946), George Orwell wrote: “As soon as certain topics are raised, the concrete melts into the abstract and no one seems able to think of turns of speech that are not hackneyed: prose consists less and less of words chosen for the sake of their meaning, and more and more of phrases tacked together like the sections of a prefabricated henhouse”.

One imagines Orwell sitting alongside a judge hearing a First Appointment or FDR, squirming while submissions are made.

This article is not intended as a pious sermon against clichés – not least because the writer is in no way qualified to give such advice. It is a consideration of five of the more unusual sayings that have become commonplace, to the extent that they are frequently cited in court as though they have quasi-legal authority: “Q. Why is this property suitable?” “A. The wife must cut her coat accordingly”.

Stacking shelves at Tesco

It’s not clear who first coined the cliché “stacking shelves at Tesco”, or why that supermarket was mentioned. ‘Stacking shelves at Sainsbury’s’ works just as well, but maybe the point is that the brand values of Sainsbury’s have always been a bit aspirational whereas Tesco represents value and honest hard work. Hence, entrepreneurs on Desert Island Discs boast about having started out stacking shelves at Tesco, because this establishes their no-nonsense origins and their can-do graft.

In court, asking a wife if she’d be willing to stack shelves at Tesco, is the equivalent of calling magistrates “Your worships”: the mark of inexperience. It’s normally also a low point in the hearing. Not because it isn’t arguable, but because it effectively says “I now realise I’ve forgotten to present evidence on earning capacity, or take instructions, but this way I’ll at least get the ball back over the net”. Alternatively, it’s the answer frequently given from the witness box to “What do you say your ex-wife should do”; followed by the judge putting on a pained expression and the other advocate loudly harrumphing.

Sauce for goose is sauce for gander

The point is a simple one: “what is fitting for the husband should also be fitting for the wife” (acc. Brewser’s Dictionary of Phrase & Fable). Hence, if the husband has made provision in his schedule of outgoings for £6,000 on holidays, why should not the wife have a similar allowance?.

Quite how this expression has become so embedded in family law parlance is unclear, particularly as sauced goose is rarely eaten, even in the Inns of Court. The expression dates back at least to Tudor England, when in 1562 John Heywood included “…deep drinketh the goose as the gander” in his book of proverbs. In his book The English Rogue (1674) the Irish writer, Richard Head, wrote “…sawce which is good for the Goose, I hope will be good for the Gander”.

Expressed judicially, the epigram can be found in several reported judgments, including the Court of Appeal in the partnership case of Morris v Wentworth-Stanley [1999] 1 FLR 83, per Potter LJ at 93, in Phippen v Palmers [2002] 2 FLR 415 per Heather Swindells and F v F (Pre-Nuptial Agreement) [2010] 1 FLR 1743 per King J (as she then was). Most recently, in Re D (A Child) (Supreme Court Jurisdiction) [2016] 2 FLR 379, Baroness Hale commented that, in the context of the 1968 Brussels Convention, “…what is sauce for the goose must also be sauce for the gander” (para [20]).

Cutting one’s coat according to one’s cloth

Unlike television’s “QI”, a klaxon does not go off in court when an advocate says something obviously trite about cutting one’s cloth. Although it should. The underlying point is an obvious one: in adapting to changed circumstances, savings will have to be made in relation to items such as housing need or outgoings.  

The phrase relates to the practice of purchasing cloth from which garments such as coats are to be cut out. It can be found in Heywood’s 1594 proverbs: “I shall cut my cote [sic] after my cloth when I have her”. Also, in John Dryden’s “Wild Gallant”: “I love your wit well, sir; but I must cut my coat according to my cloth.”

Judicially, it appears in the judgment of Mrs Justice Macur in M v W (Ancillary Relief) [2010] 2 FLR 1484 at [50], Potter P in MD v D [2009] 1 FLR 810 at [56], and TL v ML and  Others (Ancillary Relief: Claim Against Assets of Extended Family) [2006] 1 FLR 1263 at para [112] where Nicholas Mostyn QC (then sitting as a deputy high court judge) noted that the wife will “…have to cut her coat in accordance with EUR 544,000 worth of cloth”.

Meal ticket for life

A periodical payments order made without a term is generally described by lawyers as “joint lives maintenance” and by the Press as a “meal ticket for life”; particularly in relation to “landmark” cases such as Wright v Wright [2015] EWCA Civ 201 which turn out to have little, if any, legal significance. The case of Wright, an application for permission to appeal, is authority for precisely nothing (see Practice Direction 9 April 2001 [2001] 1 WLR 1001, para 6.2).

Few people, aside from those who received Luncheon Vouchers (between 1946 and their abolition in 2013), will have seen a meal ticket. The term, in the literal sense of a ticket admitting to a dining hall dates to the nineteenth century. In the figurative sense, in terms of financial dependency, it dates back to the turn of the twentieth century.The expression was used by Lord Justice Purchase in Scallon v Scallon [1990] 1 FLR 194 at 201: “I wish to say a word about ‘clean break’ which is a phrase which arises since the amendments to the 1973 Act were introduced to ensure that, where there were short-term marriages, one party should not get what is described as ‘a meal ticket for life’ upon the dissolution of such a marriage”. It appears also in Lord Justice Ward’s judgment in C v C (Financial Relief: Short Marriage) [1997] 2 FLR 26 at 46 and in MD v D (supra) at para [41].

Copper bottomed assets and the plum duff

In the seminal case of Wells v Wells [2002] 2 FLR 97, Lord Justice Thorpe commented that, where there is to be a clean break, and the family assets include both available and illiquid assets, that there should be a fair sharing “…by a fair division of both the copper-bottomed assets and the illiquid and risk-laden assets” (para [24]). The expression can also be found, per Mr Justice Coleridge, in the case of Smith v Smith [2007] 2 FLR 1103 at para [30].

The concept of “Wells sharing” was expanded by Mr Justice Mostyn in FZ v SZ and Others (Ancillary Relief: Conduct: Valuations) [2011] 1 FLR 64 in which the earlier decision in GW v RW (Financial Provision: Departure from Equality) [2003] 2 FLR 108 is cited; at para [64] “…It therefore follows that a Wells  sharing is the only way of achieving fairness. Indeed, it would seem to me that this should become standard fare where a case has a significant element of deferred or risk-laden assets. For why should one party receive most of the plums leaving the other with most of the duff?”

“Copper bottomed” refers to the eighteenth century practice of fitting copper on the underside of hulls, to protect ship from shipworms and infestation by barnacles, and has come to mean reliable. Plum duff is a variety of Christmas pudding; specifically, duff is a steamed flour pudding. 

Marital acquest

Finally, by way of contrast, the joker in the pack: “acquest”; a term of art, unknown out of its legal context, which has gained extraordinary traction in family law over the past 14 years.

The first reference to this term in an English family law report was by Nicholas Mostyn QC (sitting, as he then was, as a deputy high court judge) in the case of GW v RW (supra) at para [38]: “…I have stated above that in the Court of Appeal in Lambert v Lambert[2003] 1 FLR 139 reliance was placed on the practice of the New York courts of dividing the marital acquest equally after a marriage of long duration. The statute there is similar to ours, save that the court’s dispositive powers are confined strictly to ‘marital property’”.

The term (which does not appear in Lambert) derives from the definition of community property in the French Civil Code, article 1401 (“…des acquêts faits par les époux  ensemble ou séparément durant le marriage”). Some European countries such as France operate a “community of acquests” civil property regime whereby property acquired by inheritance or gift is excluded from joint ownership (Law Commission Paper 198, para 4.7).

The term has taken root, largely as a result of cases in which Nicholas Mostyn QC appeared as counsel (Miller; McFarlane; McCartney v Mills McCartney) or sat in a judicial capacity (GW v RW, Rossi), to describe assets built up during the marriage save by inheritance and gift. Otherwise, the word has fallen out of usage.

Conclusion

No advocate, however eloquent, can avoid using clichés altogether. However, we would all do well by resisting the temptation to resort to such easy, hackneyed phrases as “sauce for the goose”, “cutting one’s coat/ cloth” or “meal ticket”.

In Politics and the English Language Orwell proposed six rules which, if anything, apply more forcefully now than they did 70 years ago:

1. Never use a metaphor, simile, or other figure of speech which you are used to seeing in print;
2. Never use a long word where a short one will do;
3. If it is possible to cut a word out, always cut it out;
4. Never use the passive where you can use the active;
5. Never use a foreign phrase, a scientific word, or a jargon word if you can think of an everyday English equivalent; and
6. Break any of these rules sooner than say anything outright barbarous.

RM v TM [2020] EWFC 41, Robert Peel QC (DHCJ)

There’s nothing the Daily Mail likes quite as much as reporting a divorce case with judicial condemnations of costs which are “eye-watering”, “astonishing” or “absolutely barmy”.

The ideal Daily Mail Law Report (‘DMLR’) involves divorcing parties who have litigated themselves into penury, preferably illustrated by an urbane (and classically inspired) quote from the judge, e.g. Kavanagh v Kavanagh (unreported, save at DMLR [2012] 19 September), where DJ Million described the parties’:

“…wrecking the ship of their marriage then turning their attention to the lifeboats”. … The ship of marriage may founder but this couple have driven theirs full tilt onto the rocks.”

On 5 June 2020, the DMLR once again struck gold.

Under the headline “The couple who spent £600,000 squabbling for two years over their divorce are left with just £5,000 each after legal costs“, the case of RM v TM was “reported”, with several juicy quotes from the trial judge, Robert Peel QC (sitting as a Deputy High Court judge), including that:

“There may be worse examples of disproportionate and ill-judged litigation – but none spring readily to mind.”

“It is hard to express what a calamitous waste of resources this has been.”

Unusually, the Daily Mail’s version was published at the same time as a Bailii report of the actual judgment, at [2020] EWFC 41, so it is possible to cross-reference the two, to provide some legal analysis to this extremely sad case, and to understand how intelligent people instructing specialist legal teams can end up with an outcome like this.

The judgment is not an especially long one, but for the purpose of this blog (and with apologies for numbering each point), it is possible to extract the following relevant background:

1. At the heart of this case was a dispute over two family companies in which W held a minority 24% shareholding, but otherwise had no involvement (‘…a sleeping partner… uninvolved at strategic and operational level’ (§ 7));
2. From 2005 until the July 2018, H was employed as Managing Director of one of the companies. He resigned amid allegations about his conduct as MD which led at one stage to his arrest for alleged malfeasance: “…the dispute between the company (and thereby W’s family) and H rapidly spilled over into the divorce and became a proxy war in the Family Court” (§ 12);
3. The financial proceedings began in September 2018. From the outset, this was high octane litigation: H applied (unsuccessfully) for an interim order for sale of the family home, interim maintenance (“maintenance pending suit”) and a legal services payment order. When the parties exchanged their financial statements (“Forms E”) H contended W’s business interests (i.e. 24% of the two family companies) were worth £2m; W asserted they were worthless;
4. H applied for an expert to value W’s shares. Fatefully, this application was refused (per “§ 19 With the benefit of hindsight, in my view an expert report should have been directed. The parties were at least £2m apart as to the value of W’s shareholding. Liquidity was an issue. Even if non-marital (which was disputed), the illiquid capital was potentially a resource to take into account. The court must consider the whole picture; it is hard to see how the case could have been fairly determined without this evidence.).
5. H appealed the decision not to allow expert evidence (which was refused on paper) and then appealed again.
6. Meanwhile the parties locked horns on whether these shares were in any event marital (W contended that, as they had been gifted to her by her parents, they were non-matrimonial; H asserted they were marital and shareable; W said in which case she could (“as a shield not a sword”) raise allegations of H’s misconduct); they also engaged in issues relating to alleged misappropriation of monies due to the children;
7. At a pre-trial review, the court belatedly ordered an expert to value the shares, and purported to restrict the specific issues of misconduct (excluding allegations of H’s alleged malfeasance)
8. The final hearing (2-6 September 2019) overran. Indeed only W’s case was heard in those five days. The court directed a further hearing in November 2019 and controversially allowed further inquiry into H’s alleged financial misconduct (this went beyond the PTR recital of the ‘conduct’ issues). H invited the judge to recuse himself (refused), and then appealed this non-recusal and the direction for further inquiry;
9. Mr Justice Mostyn granted H permission to appeal, which was listed before Mr Justice Moor on 24 January 2020 (causing a postponement to the November hearing). Moor J allowed H’s appeal against the judge’s handling of the hearing but refused the recusal appeal: the hearing was remitted back for final hearing before a different judge. Moor J directed that if W intended to rely on conduct it must be specifically pleaded.
10. H was dissatisfied by Moor J’s direction that allowed W to enlarge her ‘conduct’ argument, or the recusal decision, and appealed to the Court of Appeal (who refused permission). An FDR took place before Cohen J and a fresh 5-day final hearing was listed before Robert Peel QC (DHCJ).

At this point, it is worthwhile drawing breath and noting how litigation can get out hand. This was not a case where one party was always in the wrong. H’s application to instruct an expert was initially refused but ultimately succeeded. His appeal against the original trial judge’s handling of the September final hearing was successful (albeit not on every ground). Against that, there were numerous applications and hearings – 13 in total – where H was not successful.

However the parties’ costs, funded by litigation loans, rose inexorably so that by the final hearing in May 2020 the “only asset of significance is the proceeds of the FMH [former matrimonial home] of which £630,000 remains” and the parties costs amounted to £214k and £251k (H) – excluding other liabilities. In addition, W held her shares (which the court valued on a ‘quasi-partnership’ basis, i.e. without discount, at £320k), H had pensions worth £500,000 and W had pensions worth £229,000.

Outcome and two legal points

The court’s decision was that the proceeds of sale of the FMH should be divided £337k to H and £220k to W. Net of costs, this would leave H with £5,423 and W with £5,368. This would enable H to rehouse for £250k using his mortgage capacity of £128k and £125k he could commute from his pension (§ 80). W had a mortgage capacity of £132k but the court was satisfied that her family would assist to buy suitable accommodation, and proceeded on the judicious encouragement/ Thomas v Thomas basis (§ 81).

Two points of legal interest may be noted:

(a) Stretching resources

Firstly, the court cited with approval the time honoured guidance of Thorpe LJ in M v B [1998] 1 FLR 53 (paramount consideration of ‘stretching resources’ to meet both parties housing needs where possible’) but commented:

[76] In Piglowska v. Piglowski [1999] UKHL 27Lord Hoffmann, commenting on M v B, said: “This is a useful guideline to judges dealing with cases of a similar kind. But to cite the case as if it laid down some rule that both spouses invariably have a right to purchased accommodation is a misuse of authority.” Although not an iron rule, to my mind the dicta in M v B apply self-evidently in the majority of cases, and certainly in this one.

(b) Judicious encouragement

The court reviewed the law on judicious encouragement (i.e. seeking to persuade W’s family to provide financial support) and applied the following principles:

(i) The starting point is that there is absolutely no obligation on a third-party family member to provide funds from his or her personal resources. As Holman J vividly said in Luckwell v Limata [2014] EWHC 502 at para 6: “I wish to stress with the utmost clarity that neither the wife’s father nor her mother are under the slightest legal obligation whatsoever to pay a single penny to, or for, their daughter, nor their grandchildren, nor, still less, their son-in-law.” This statement is wholly consistent with law and fairness. The court’s function is to distribute the parties’ resources, not the resources of wider families; see paras 66 and 67 of Alireza v Radwan [2017] EWCA Civ 1545.

(ii) That said, on occasions wider family members may show themselves prepared to assist, willingly and under no pressure from the court to do so. Two distinct scenarios spring to mind;

(a) Whether a spouse’s family will be likely, if requested, to come to his or her aid in meeting specific needs personal to the spouse in question and;

(b) Whether a spouse’s family will be likely, if requested, to come to his or her aid in making a payment to the other spouse to assist in bringing financial remedy proceedings to a conclusion.

(iii) The first scenario is not uncommon. If means are available, the wider family, although under no legal obligation to do so, may willingly help with buying a house or meeting income needs if the alternative is homelessness and penury. But the evidence of willingness to do so must be clear. Mere speculation, or optimistic assumption, is insufficient.

(iv) The second scenario is rarer, for obvious reasons, although it can unlock cases and bring about settlement. For example, the family of a spouse may offer to pay the receiving spouse a lump sum to avoid sale of the marital home. Again, in my judgment, there must be clear evidence to justify such a finding. Speculation and optimistic assumption will not suffice.

(v) The court should not place pressure on the third party who is perfectly entitled to decline to provide support. As Deputy High Court Judge Nicholas Mostyn QC (as he was then) said in TL v ML [2005] EWHC 2860 at para 101:

“The correct view must be this. If the court is satisfied on the balance of probabilities that an outsider will provide money to meet an award that a party cannot meet from his absolute property then the court can, if it is fair to do so, make an award on that footing. But if it is clear that the outsider, being a person who has only historically supplied bounty, will not, reasonably or unreasonably, come to the aid of the payer then there is precious little the court can do about it.”

The judge was there addressing the second of my suggested two scenarios, but in my view his remarks apply with equal force to the first scenario.

(vi) In either scenario, where the evidence shows, to the requisite standard of proof, that third party family members will likely provide financial support to one or other of the spouses, that, in my judgment, constitutes a resource that a court is entitled to take into account. To do otherwise would be artificial. As to the sort of evidence which the court will evaluate when deciding upon the likelihood of future assistance:

(a) Usually the court will look to see whether bounty has been provided in the past, in what quantity and over what amounts of time, as evidence of a pattern.

(b) Additionally, the court can look at specific offers of long-term future financial support made to a spouse before or after marital breakdown.

(c) Offers of interim provision to tide the spouse over with assistance towards legal fees and income needs during the period of litigation will be of very limited evidential relevance to the question of whether long-term future support will be forthcoming. Usually such payments are transitory in nature, designed to assist the recipient spouse with the demands of the litigation.

(d) Absent clear evidence establishing (i) a track record of historic payment and/or (ii) reliable representations of future subvention, the court will be hard pressed to be satisfied of this class of resource.

Ultimately, however, the judgment resounds with the quotation that appears in the DMLR:

§98 This self-defeating litigation is now over. It is scarcely credible that at the end of it all, they emerge with about £5,000 each of liquid assets, having incurred nearly £600,000 of costs, but such is the reality. There may be worse examples of disproportionate and ill-judged litigation, but none spring readily to mind.

Alexander Chandler, 7 June 2020

A Day In The Life… (August 2016)

What is your position and what you do on a day-to-day basis?

I am a barrister and arbitrator at 1 King’s Bench Walk, specialising in financial remedies and TOLATA claims. I sit part-time as a Deputy District Judge in London in civil and family work, and as a panel member on the Bar Disciplinary Tribunal.

How long have you been in this role and what brought you here?

I’ve been a barrister for 20 years and have been sitting for 4 years. The thought of being called to the Bar didn’t occur until after graduation: up until then I vaguely imagined that I’d be a historian, or possibly a critically acclaimed singer-songwriter. I did my 12-month pupillage at 1 King’s Bench Walk, before joining 1 Garden Court as a tenant in 1997. Sixteen years later, in 2013, I rejoined 1KBW.

What are the people you work for/with like? Any memorable stories?

I’m lucky to have worked with, and been instructed by, intelligent and interesting people throughout my career, many of whom have become friends. In the early years of my career at 1 Garden Court – a time of plentiful and decently paid legal aid work – the junior end would go on holiday together, causing unappreciated havoc in a clerks room denuded of barristers under 10 years call. I am now happily settled as a member of 1KBW which, as well as being a leading set for financial and children work, has to be one of the most sociable chambers in the country.

In terms of lay clients, I don’t think I’ve ever acted in a dull TOLATA claim or an uninteresting ancillary relief. It is easy to take for granted the privileged position we are in as solicitors and barristers in family law. All human life is here, including the Russian wife of an oligarch who (after I had attempted to be gallant by hailing her a taxi on the Strand) said in a deadpan voice, ‘Is not necessary’, as her chauffeured Bentley drew up.

What is the best and worst part of the day for you? 

As a barrister, it helps if you like early mornings. I travel less than I used to, but I still enjoy getting to the train station at 7am, dosing up on coffee and boarding a train that was crammed with commuters on the way in, but is now almost empty as it goes out. Equally, it’s a pleasure to come back from court and have time to read on the way back home and to check my Twitter feed (@familybrief).

Without wishing to sound sappy, I don’t have a worst part of the day. Having said that, I doubt I’ll look back on being regularly woken up by a child kicking me forcefully in the jaw, with great fondness.

What adjectives best describe you?

My middle daughter was recently asked this question at school. Her reply was ‘strict, playful and tall’. To which I would only add: ‘… and committed to tirelessly achieving the best possible outcome for my client, regardless of the personal sacrifices involved’ (if any prospective instructing solicitors are reading).

What keeps you motivated?

Doing a professional job, broadening my understanding of the law, and pushing myself towards greater clarity and precision. I believe the applicable term is ‘kaizen’, according to my studies of Japanese philosophy (ie reading the blurb on the menu at Wagamama). 

I also keep in mind a story Matthew Brunsdon-Tully relates about how Lord Wilson used to tell his pupils: ‘you’ve got to make the papers sweat!’. That really is the key: being on top of your brief. 

Tea or coffee?

Coffee before 11am, tea afterwards. 

In fact, that’s a rule more honoured in the breach. My eldest daughter (now six) recently drew a cartoon called ‘The man who drank too much coffee’. In it, a woman who is possibly my wife says ‘No more coffee!’, to which I, sitting with my head in my hands, cry: ‘NO! I must have coffee’. The story ends happily. 

What would you say to anyone thinking of a career in your field?

It isn’t easy to come up with original advice. The two clichés that always apply are (1) the profession is more difficult to break into than it used to be, so don’t bother unless you are determined but (2) keep at it if you are. 

To which I would only add, keep humble. Don’t approach the law as if you’re a contestant from X-Factor. 


What song do you listen to the most?

According to iTunes, my most listened song is ‘War on War’ by Wilco. Followed by ‘For a Spanish Guitar’ by Gene Clark. (Full list available on request. I can, quite literally, bore for England when it comes to music.) 


How do you enjoy your time outside of work?

The first casualty of having children (I have three) is your social life, followed by newspapers, relaxing holidays and a car that is smaller than a tank. 

In their place (the activities, not the children), my weekend rituals involve taking the children to Kew Gardens, running the Tamsin Trail around Richmond Park, reading and cooking. Thus far, my midlife crisis has involved me entering half- and now full marathons in day-glo colours. 


If you could change one thing about the family justice system what would it be and why?

While I enjoy TOLATA work, it is simply ridiculous that the financial claims of unmarried couples are determined by reference to trust law, where the court’s objective view of a fair outcome has such a limited role. I would favour a change in the law towards the Scottish model of cohabitee rights.