A costly lesson: A case commentary on M v M [2020] EWFC 41
It is not often that write on recent cases, although perhaps I should try to write up my thoughts more often. However, the case of M v M [2020] EWFC 41 has attracted my attention this weekend.
This is not because of any critical precedents that it sets, or for the well formed legal arguments before the court (although I am sure there were many), but rather for the stinging criticism the parties received from the judge.
As a civil litigator, this case stands out to me as an object lesson of the dangers of embarking on long winded litigation and the associated costs.
The case was heard by Mr Robert Peel QC (sitting as a High Court judge) and concerned the determination of financial resettlement between a couple who had been married for 21 years and had three children.
Family law is by no means my forte so I shall not delve into the complexities of the case history too much. It is the costs position and the judges' comments that interest me most.
Needless to say, the litigation had not been smooth and has resulted in the parties incurring substantial legal costs to date. In fact, I struggle to recall a case that I have encountered with such a costs to assets ratio.
The opening paragraphs of the judgment read as follows:
"1. After nearly 22 years of marriage, which must have contained happy times together and during which 3 children were born to whom the Husband ("H") and Wife ("W) are devoted, this couple embarked on ruinous and recriminatory financial remedy proceedings. There have been 13 oral hearings, including 2 FDRs and an aborted 5-day trial, and 4 applications by H for permission to appeal disposed of on paper at High Court and Court of Appeal level. The combined legal costs are £594,000. The litigation, and attendant bitterness, has led to fractured relations between H and the children."
"2. One might be forgiven for assuming that all this energy has been expended over great wealth. This is not so. The only liquid asset of any substance is the proceeds of sale of the FMH, some £630,000 currently held on solicitors’ account. That sum is now all but offset by the parties’ debts, not least the legal fees. **Thus, the true net liquid wealth is virtually nil. I am left with the task of endeavouring to find a way in which each party can somehow be re-housed. That, in my judgment, is and always has been the real issue in this case. "*
"3. An equal division of £630,000 would be £315,000 per party from which each would have to meet their indebtedness. W’s open proposal at the start of trial was broadly for that outcome, but subject to the sum of £52,000 being top sliced to repay her brother who paid the mortgage for a period after separation. Thus, on her case each party would receive £289,000. H in his open proposal sought £480,000. The difference between the parties’ offers is £191,000. The legal costs are 3 times that figure. It is hard to express what a calamitous waste of resources this has been."
From these opening paragraphs, the judge sets out clearly what an incredible waste of costs this litigation has been, but perhaps the most succint quote from this case comes from the concluding paragraph:
"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."
If nothing else, this litigation should be a lesson to all not to litigate a matter purely on principal and to keep in mind what is being sought to achieve. Of course, I did not represent either party in this case so I do not know the full history of these costs. Even if I did, do not profess to be an expert in family law. However, one can imagine that each party emerging from the divorce with £5,000 from nearly £600,000 of assets is not what was envisaged by either party (or their legal representatives) after almost 22 years of marriage.