Michelle Danique Young v Scot Gordon Young
| Jurisdiction | England & Wales |
| Judge | Mr Justice Moor |
| Judgment Date | 22 November 2013 |
| Neutral Citation | [2013] EWHC 3637 (Fam) |
| Docket Number | Case No: FD07D02865 |
| Court | Family Division |
| Date | 22 November 2013 |
[2013] EWHC 3637 (Fam)
IN THE HIGH COURT OF JUSTICE
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Moor
Case No: FD07D02865
Mr Rex Howling QC and Miss Suki Johal for the Applicant (instructed by Vardags)
The Respondent appeared in person, assisted by Ms Kelly Edwards (solicitor from Sears Tooth & Co) on the first and last day of the trial
Mr Ben Patten QC for the witness, Mr Stephen Jones, a solicitor
Mr Philip Cayford QC for the witness Mr Paul Osborne, a solicitor
Miss Sarah Cockerill QC for the witness Mr Poju Zabludowicz
Mr Charles Hollander QC for the witness, Mr Michael Slater, a solicitor
I have been dealing with an application for the full range of financial remedies by the Applicant, Michelle Young (hereafter "the Wife") against the Respondent, Scot Young (hereafter "the Husband"). I mean no disrespect in calling them Husband and Wife but do so merely for the sake of convenience.
I must also consider an application dated 24th October 2013 made by the Husband to vary a maintenance pending suit order made by Black J in 2009 to a nominal figure and to remit the arrears, which the application says currently amount to £1,265,000.
This case has been quite extraordinary even by the standards of the most bitter of matrimonial breakdowns. It has been conducted in the full glare of the Media. Extremely serious allegations have been bandied around like confetti. Some of these allegations can only be described as " wild". The case has cost the Wife millions of pounds in litigation fees. It has taken some six and a half years to come to trial. There have been around 65 separate hearings. At an earlier stage, I committed the Husband to prison for six months for contempt of court. I am now going to have to make a large number of findings of fact in relation to matters that are very hotly in issue. I have also decided that I have to be highly critical of the way in which the case has been conducted at various times by both parties. In many respects, this is about as bad an example of how not to litigate as any I have ever encountered.
Legal Representation and costs
Mrs Young has been represented by Mr Rex Howling QC and Miss Suki Johal, instructed by Vardags. It has rightly been made clear to me that both counsel and Vardags are doing this on the basis that they will get paid only if Mrs Young succeeds in obtaining a significant lump sum from Mr Young. Moreover, there is no uplift on their normal fees if there is full recovery.
Her previous advisers have been paid by a number of different litigation funders. I accept entirely that a litigant who has no assets and cannot obtain legal aid is in a very difficult position in funding very complex litigation. In one sense, the Wife did amazingly well to be able to obtain as much litigation funding as she did, given that she had no security to offer. The amounts spent, however, are truly eye watering. She has had three separate arrangements. The first was with an organisation called Harbour who provided her with funding of £400,000. The arrangement was terminated on 4th December 2009. She then obtained funding from Bracewell Law who provided £1,000,000 before terminating the arrangement in July 2012. Finally, she reached an agreement with ASCL and others. Pursuant to this arrangement, the sum of £2,733,712 was advanced, which included a loan of £626,000 from Ideas Workshop.
I was told by Mr Singleton QC who appeared on behalf of Mrs Young on 3rd October 2012 that she had funds from ASCL and others that were sufficient to carry them to the end of a fully contested hearing. As the amount of funding was £3 million, Mr Singleton was absolutely correct. For reasons that completely escape me, the money was entirely spent long before the final hearing commenced. Worse, many of the straightforward directions that I made were simply not complied with. For example, I directed that the Wife file a report from a Mr Luke Steadman of Alvarez & Marsal Global Forensic Dispute Services LLP by 1st March 2013 as to the Husband's financial position. It is right to note that Mr Steadman did file a statement in November 2012 responding to an Affidavit of the Husband. I have found his statement very helpful but no report was filed either by 1st March or at any other time.
I recognise that this case has been as complicated a Financial Remedies case as has been dealt with before these courts. I accept that it has not been helped by the fact that the Husband has been found to be in contempt of court for failing to provide full and frank disclosure. The Wife has had to engage in considerable self-help, which has increased her costs dramatically. She paid her first team of Forensic Accountants from FTI Consulting £500,000 for investigating the case and providing two Preliminary Reports. Indeed, I understand FTI has a claim against her for a further £300,000 of costs that she has not paid. I do not criticise these costs as I accept that this was a case of huge complexity, in which FTI had to consider 127,721 documents from electronic media as well as a further 39,359 pages of hard copy documents.
The problem was that, when FTI's final bill of £300,000 was unpaid, the Wife had to change forensic accountants. She went to Alvarez and Marsal and Guidepost Solutions, a firm of investigators instructed at the same time. I accept entirely that the process will have had to start almost entirely again. I am told, however, that Alvarez and Marsal have claimed £800,000 in costs and Guidepost Solutions some £700,000. I have not heard submissions on behalf of either entity and I am therefore not able to say anything further about how these costs came about. It is, however, a fact that, having spent £800,000 on FTI Consulting, a further £1.5 million was incurred without production of a final Accountant's report. Worse, it meant that the Wife ran out of litigation funding long before the final hearing commenced. Moreover, when a further application was made to adjourn in June 2013, I was told that the Wife felt constrained to employ a third firm, who were likely to charge another £750,000. This was not possible as she failed to secure any further litigation funding despite her best efforts to do so.
I make it equally clear that I do not want to say anything that makes it even more difficult for litigants to obtain litigation funding in the future, particularly given that there is no legal aid available in this area any more. Nevertheless, the Wife has had over £4 million in litigation funding. She has also spent some of her own money and owes around £750,000 to lawyers and accountants over and above the litigation funding. She had therefore spent around £5 million without getting to the final hearing or having produced a final forensic accountant's report. Her current solicitors and counsel have produced a costs schedule showing costs incurred by them of a further £1,605,052. I should say that £180,000 of this related to an earlier period when Vardags represented the Wife. In total, it means the Wife's costs of this litigation have been around £6.4 million. Whilst I accept that this has been exacerbated by repeated changes of solicitors, in part as a result of the litigation funding issues, and that this case has been as complex as any I have dealt with, I consider the total amount spent to be completely unacceptable.
I remind myself of the overriding objective in Rule 1.1 of the 2010 Family Procedure Rules that cases must be dealt with justly. This case has fallen foul of just about every part of this rule. So far as practicable, cases must be dealt with expeditiously and fairly yet this case has taken nearly seven years. They must be dealt with proportionality. Even though this Husband's affairs were exceptionally complicated, the case has not been dealt with proportionally at any stage. Parties are to be on an equal footing. The Wife has been able to spend around £6.5 million in funding whilst the Husband has been in person virtually throughout. I entirely accept that, if I find that he has hidden substantial assets, it will follow that his decision to act in person was a deliberate tactical one. The Rule goes on to say that expense has to be saved. There has been absolutely no saving of expense in this case. Finally, the court has to allot to each case an appropriate share of the court's resources. It is difficult to see how 65 preliminary hearings followed by a final hearing lasting 20 days can possibly be a fair allocation of this court's limited resources on one case.
It follows that I am quite sure that in cases such as this, there should be rigorous control on the amount spent, in particular, on expert evidence. It cannot be right that all the litigation funding is spent long before the final hearing, which is, on any view, the most important part of the entire litigation exercise. Maximum figures need to be placed on the disbursements incurred. If the solicitors and clients are not willing or able to do so, the court will have to impose limits. Without such restraints, litigation funders will be put off supporting these cases for ever.
I have deliberately decided not to deal with the terms on which the Wife's litigation funding is said to have been advanced. I have not heard from the litigation funders. It may be that the Wife will, in due course, challenge the enforceability of the agreements. It would be completely wrong for me to say anything that might influence any such litigation. I will therefore be dealing with the case on the basis that the Wife has total debts of around £6.5 million connected with this litigation. Moreover, her liabilities may increase substantially if the funders can enforce the terms of their contracts with her.
As already noted, the...
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