In divorce proceedings, those who make overly ambitious financial claims or fail to enter into reasonable negotiations are highly likely to end up worse off. The point was powerfully made by a case in which a bitterly opposed former couple ran up more than £1.2 million in legal costs bills.

Following a hearing, a family judge directed the husband to pay the wife a lump sum of £750,000. That was only a fraction of the more than £6 million she had initially claimed. £237,000 of the award was to clear her debts, mainly comprising unpaid legal bills. The husband had already paid £400,000 towards her costs.

The wife failed to satisfy the judge that there had been a significant period of pre-marital cohabitation that entitled her to an equal share of the husband’s corporate assets. She had caused the husband financial losses, probably running into tens of millions of dollars, by preventing him from selling units in a company following its listing.

For his part, the husband only disclosed right in the middle of the litigation that he had already sold some units in the company. His failure to fully and frankly disclose his assets was deplorable. His initial offer to the wife was just £30,000 and even his final offer of £400,000 had been comfortably exceeded by her award. The wife had been justified in vigorously pursuing disclosure issues.

The judge acknowledged that the complexity of the husband’s financial affairs may well have rendered the case impossible to settle. However, had certain issues not been so hotly contested, it would have been a relatively straightforward needs-based claim and the costs on both sides would have been vastly reduced.

As matters stood, the husband was liable to pay the entirety of the wife’s legal costs, which came to £619,000, together with his own. The judge, however, ruled that that was not a fair outcome and ordered the wife to pay £100,000 towards the husband’s costs. The costs order would eat into her needs-based award, but the judge noted that she would have to trim her outgoings accordingly.

Source: Private Client News