Cambridge Family Law Practice

A man who ran up a large legal bill pursuing a financial claim against his ex-wife must contribute to her legal costs, a High Court Judge has ruled.

The case concerned a three-year marriage. The couple had lived together in Dubai.

Before their marriage, the couple had signed a prenuptial agreement because the wife had a fortune of over £60 million, which she had inherited from her father. She also received a significant amount of income from rental property and investments, none of which were subject to income tax in Dubai.

By contrast, the husband’s assets ran to around £850,000, with the majority tied up in property.

The prenuptial agreement stipulated that, in the event of divorce, each party would keep their own personal property, while jointly owned property would be divided between them. In addition, neither party could make claims against the other spouse, and the applicable jurisdiction would be England and Wales.

The husband pursued a settlement of £10 million from his ex-wife. This was later reduced to £2.4 million as the acrimonious proceedings continued. At one point, the wife threatened to pursue him for maintenance despite her own wealth.

During the drawn-out legal confrontation, both parties had run up large legal bills. The wife’s legal costs ran to approximately £600,000 and the husband’s to around £450,000.

The case came before Mr Justice Francis in the Family Division of the High Court. He concluded that the costs accumulated by each party had been inflated by unwise tactics. He noted:

“From 24 November 2022 until 23 August 2023, the husband persisted with the offer made in his Form E of £9.6 million, plus periodical payments to support an asserted income need of £208,000 a year for two years, hence a global sum of £10 million.”

The Judge continued:

“The absurdity of that offer made by the husband is best demonstrated by his own position adopted in this hearing which, as I have said, is £2.4 million. This represents a collapse of 75 per cent in the claim that he has pursued. Parties litigating after their divorce need to appreciate that litigation is not a negotiation which rewards untenable positions. Starting high to try and make the midpoint higher than it should be is an unwise tactic. The same, of course, applies the other way around, if one starts low. Offers need to be focused, wise, based on likely outcome and not on greedy expectation. The penalty of the failure of such tactics will resound in costs and can be devastating in their consequences.”

The husband had claimed that the couple had cohabited for longer than they had in reality, and had lacked a realistic view of the value of his claim. By continuing to pursue it he had ended up worse off than he would have been if he had accepted the wife’s earlier offers.

Turning to the wife, Mr Justice Francis explained:

“For her part, the wife allowed, if not caused, a remarkably unhelpful and poorly thought through letter to be sent to the husband shortly after the separation. The wife’s Dubai solicitors informed the husband by letter dated 24 August 2022 that the husband had to leave the former matrimonial home within three days or face forcible removal by the Dubai authorities. His right of residence, which had been provided by a visa from W’s father’s company as a result of his historical employment there, had been revoked earlier that month … The letter threatened him with proceedings for divorce and even maintenance in Dubai. Quite apart from the fact that this was a completely absurd threat when the wife had £60 million or £70 million to her name and the husband had very little, this also flew in the face of the very prenuptial agreement on which the wife sought to rely… And so it was that the husband felt obliged to leave Dubai, which had been his home for nine years, his belongings were placed in storage and, as I understand it, remain there to this day.”

Mr Justice Francis continued:

“…when parties litigate in this fashion, a nuclear winter descends, and negotiation becomes all but impossible. Positions become entrenched. Costs are incurred.”

Mr Justice Francis awarded the husband £400,000 to meet his immediate needs, including medical treatment, a car and two years’ rent, but stressed that a contribution of £75,000 to his wife’s legal costs would also have to be deducted from the settlement.

The Judge concluded:

“…I have said time and again, and other judges of the division have said time and again, that costs must take centre stage in these cases. Just because you are married to someone rich does not mean that you get a blank cheque to underwrite your costs.”

Adam Moghadas, one of the partners here at Cambridge Family Law Practice, notes: “This case highlights the fact that the courts are starting to clamp down on outlandish costs caused by outlandish claims. It further shows that, whilst rare, no one is immune to a costs order being made against them.”

Read the full judgement here.