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Proportionality of divorce costs

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Divorce costs have been in the news recently with a senior Judge describing costs of £920,000 in the recent case of J v J [2014] EWHC 2654 (Fam) as “eye-watering” and “grotesque” but while the scale of costs in the particular case is worthy of comment, the issue of proportionality is something that has troubled the family courts for many years. Proportionality is the comparison of the value of the assets in the case to the legal costs.

In the cautionary tale of Piglowska v Piglowski [1999] 1 WLR 1360 the parties ended up spending £128,000 in costs over asset pool of £127,400 and in the case of KSO v MJO & Ors [2008] EWHC 3031 out of a total asset pool of £818,416, the total costs incurred were £553,460.

Costs at that level are certainly the exception rather than the norm but for many separating couples, a lack of information or clarity in how much there legal costs are likely to be only adds to the stress of separation. A key issue is ensuring that the clients know precisely what the costs are likely to be, how costs are calculated and more importantly, what they can do to keep costs from escalating arguing about matters that are not overall important. Clients should also be advised as to how they may keep costs down by undertaking some of the preparation and investigation themselves.

It is in fact not quite accurate to say that divorce costs have rocketed as it is usually dealing with the financial or children issues where  legal costs are really incurred.

Many solicitors will offer a fixed fee for the divorce suit as this is usually a fairly straightforward process without any requirement for attendance at court but instructing a solicitor to deal with financial or children matters is still usually charged based on an hourly rate and this is where the costs can creep up.

While the disapproving thrust of the recent judicial comments on costs seems to have focussed on the solicitors, the cases that prompt judicial comment often include a high level of additional costs including barristers fees and professional reports.

There has been recent Judicial comment that the time may have come for the capping of legal fees in family litigation but this option may be too simplistic for the widely varying types of cases and clients that go before the family courts.

Para 1.1 of the Family Procedure Rules sets out that the overriding objectives in any family proceedings should include:

(b) dealing with the case in ways which are proportionate to the nature, importance and complexity of the issues;

(d) saving expense;

While there may well be cases where legal representatives seem to have lost sight of the there are also cases where the one or other- or indeed both- parties are determined to litigate to the bitter end and proportionality be hanged.

One of the difficulties with a capped or fixed fee option is that it can be difficult to predict how litigation will develop- the complexity of cases and the parties’ willingness to negotiate will have a huge impact on costs and these issues are not always clear at the outset which leaves solicitors reluctant to fix an overall fee at the start of a case.

An increasingly common option is for solicitors to fix separate fees for each stage of the case and to cap the number of hours of work that will be covered within a fixed fee. This can encourage clients to focus on using their solicitor’s time effectively and provides a level of certainty on costs.

Not all cases will be suitable for fixed fees but there is no doubt that the concern about uncapped costs is not going to go away. There are a number of cases currently before the courts where costs have reached seemingly stratospheric levels and no doubt we will be hearing from the court again on this issue.

We offer advice on all family law matters here at TV Edwards and are happy to discuss whether fixed fee options may be available for your case but certainly provide a firm and accurate estimate of costs at rates many people can afford.

 

 

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