Dividing the matrimonial pot – into three?
Mostyn J's judgement last week in the matter of J v J , where he vigorously berated the disproportionate costs incurred by both parties to a divorce in pursuing financial proceedings, has understandably sparked considerable commentary amongst family practitioners.
The Case – J v J
J v J involved an acrimonious divorce and subsequent ancillary relief application, which had been so heavily litigated and over-manned that the matrimonial pot had been depleted by £920K by the time the case came before Mr Justice Mostyn. The ludicrous nature of the situation is aptly demonstrated by the fact that the costs incurred by the parties actually exceeded the financial award finally made to the husband.
Although Mostyn J stated that the husband had been "guilty of litigation misconduct"; his suggestions for preventing such an "appalling state of affairs" from transpiring again in the future were focussed on heavier regulation of the solicitors involved - or "delinquent practitioners" as he coined them.
He suggested firstly that solicitors should fix their costs for each stage of the proceedings at the outset of a matter, only then to be departed from in certain extenuating circumstances.
In effect, this already happens – or at least it should. Solicitors should provide a fee estimate at the point of initial engagement. The estimate should be agreed in writing and then monitored and re-assessed constantly as the matter progresses. It is already common practice for family solicitors to split the three court stages of a financial claim and the associated costs of each in this way.
It is true though, that these are estimates and not fixed sums. However, it is practically impossible to ascertain precisely at the commencement of any case exactly how much time will be required from both sides, never mind the fact that the position is almost certain to change (for better or for worse) as the matter unfolds.
The fixed-fee approach can therefore be potentially harmful to the client, particularly in more complex financial cases. It is likely that if solicitors are bound in this respect, then the quality of the service clients receive will diminish as corners are cut in an attempt to curb costs and keep within the fixed fee. Furthermore, it may lead to clients being made to make much higher payments on account initially, in order to provide solicitors with a buffer with which to protect themselves should the case begin to 'unravel'.
His second recommendation was that the court should be able to impose a cap on the parties' costs for each stage of the case at the outset of each matter, with the possibility of a variation only if there is a significant change in circumstances. Whilst individual caps could potentially eliminate the imbalance between parties where one tries to 'out gun' the other by employing expensive lawyers, counsel and experts; a joint cap would surely fail to ensure adequate protection for a party with less financial might, from the other deliberately 'using up' the costs.
Put simply, solicitors should not effectively become a third party to divorce and/or financial remedy proceedings.
There is no question that any such "delinquent practitioners" who deliberately encourage acrimony in an attempt to drive up legal costs should be punished. However, Mostyn J's comments do not seem to take into account the arguably unenviable position that family practitioners can find themselves in when involved in an acrimonious case.
Another of Mostyn J's observations in J v J was that "The only commodity being charged for was time rather than product". This comment, whilst accurate, does not appear to acknowledge that this is exactly the position when parties are locked into a dispute about finances where neither is willing to give an inch. In such a situation it is unclear what family solicitors should do except continue to try and reach a workable agreement – which commonly involves expenditure of time, often with little or no 'product'.
To act in the best interests of your client does not mean forcing them to behave in a certain way but nor does it mean allowing their anger and angst to rule them whilst you sit back and watch the costs rack up. It is our duty to provide clients with a grounded and realistic view of their situation, to manage the inevitable emotions involved and to help them channel those feelings towards a positive outcome.
The primary objective of our dedicated team of family solicitors is always to act in our client's best interests. This includes ensuring that our clients receive clear fee estimates at the outset of their matter and are kept up-to-date regarding the status of their costs at every juncture.
We also promote a forward thinking approach, keeping the client's ultimate settlement and objectives in mind at all times by considering the emotional and financial implications of each step taken or decision made.
Our experienced family solicitors are able to tailor your costs at the outset of your matter to suit your individual financial circumstances, and we actively encourage our clients to be as personally involved in their own cases as they wish to be, in an attempt to alleviate legal costs. Throughout the process we ensure that costs are kept under control, whilst always focussing on obtaining the most advantageous outcome possible for our clients.
It is imperative that clients understand that the costs involved can vary, often significantly, depending on the individual circumstances of the case. Factors that are out of both the clients' and the solicitors' control can increase legal costs, such as: the opposing side being obstructive and causing delays; complicated financial disclosure; complex assets and/or prolonged disputes regarding finances and/or arrangements for any children of the family. Our team always endeavour to promote negotiation and amicability between parties and will never advocate hostility or a combative approach in court proceedings.
Mostyn J's career as a practitioner surely means that he is all too aware of the fact that clients can easily argue away their finances despite the best efforts of their legal advisors to persuade them against doing so. It is our role as clients' trusted advisors to ensure that whilst we act only on their instructions, we do not allow this to slide into encouraging their animosity to boost our fees. It is often the case that acting in a client's best interests does not mean pandering to their every wish.
It is one thing to propagate the need for policy and legislation in order to regulate any "delinquent practitioners" – but if solicitors are not adhering to the basic principles that go to the core of the profession, i.e. acting in a client's best interests, then surely this is the real problem that needs to be addressed. Ensuring compliance with existing measures and principles should be the primary objective before any further regulation is imposed.
The crux of the matter is, if family practitioners were currently adhering to the principles of the profession, there would be no requirement for either of Mostyn J's suggested measures. At Michelmores, we see absolutely no merit in unnecessarily aggravating or drawing out the divorce process. Our role is to protect your hard-earned assets and not to squander them through avoidable legal arguments.