Francis J. Costs judgment in ‘paradigm case’ of how not to conduct litigation in a short childless marriage, which started as a show cause application. Case summary here.

The parties’ costs of the costs hearing alone totalled almost £50,000.

Notwithstanding that the proceedings commenced with W’s show cause application, because W since made an application for a financial remedy order, the proceedings are financial remedy proceedings and therefore the general rule applied.

The judge did not hold it against either party for not mediating on the basis that there are some cases not suitable for mediation, for example where there has been ‘bad acrimony’ between the parties.

The parties did attend a private FDR, shortly after which W made an offer to settle for £500,000. The judge considered that offer to be ‘spot on’, in particular given the final award was £400,000. H’s counter offer was £2.5m; the difference between the parties’ positions was whether H should receive sufficient to purchase a house outright or not. The judge concluded that, even absent the prenuptial agreement, the H would not have got anything like his offer at a final hearing and the significant costs in this case were incurred in consequence of that ‘high, inappropriate and incorrect offer’ made by H.

W made a further offer of £800,000 which was time limited. H rejected that offer prior to its expiry.

The costs order sought by W amounted to 37% of H’s needs award. H already had to deal with his own outstanding costs of £233,000 to final hearing, which then went up by a further £20,000. However, the judge had included the costs liability to H’s solicitors within his needs, i.e. as a debt to be repaid.

The judge considered that he must make the point that ‘people cannot litigate freely and without consequences of what it is they are doing’ but he also had to bear in mind the financial effect on the parties of any costs order.

The judge’s needs assessment was a generous one and, he considered, there was nothing inconsistent with a judge assessing needs at one number and ordering a party to pay costs from that.

The judge ordered H to pay £75,000 towards W’s costs, which was to be netted off the amount that W had to pay the H.