Peel J. Application by W for (i) Maintenance Pending Suit (MPS) pursuant to s 22 of the Matrimonial Causes Act 1973 and (ii) a Legal Services Payment Order (LSPO) pursuant to s 22ZA of the Matrimonial Causes Act 1973.

The parties began cohabiting in 2004, married in 2009 and separated in 2021 (c.17-year marriage inc. pre-marital cohabitation). Both are nationals of E country and have three children. In 2024, W issued her divorce petition and Form A in England. After H became aware of W’s petition, he issued rival proceedings in E country and applied for ‘obligatory associated’ child proceedings to ‘regularise’ the arrangements for the children.

Parties in dispute about jurisdiction. W’s financial remedies application could not be pursued until this was resolved, but dealt with interim financial issues pending the hearing of the jurisdiction/forum dispute.

Financial disclosure

Forms E have not been filed due to the jurisdictional dispute. H provides no outline of his resources in his statement, instead the assertions made including ‘I would be able to meet reasonable orders made by the Court’ amount to a form of millionaire’s defence. Peel J states that he would have expected H to at least provide a bare outline of his resources in his statement and that disputing jurisdiction does not absolve H of the responsibility to give some outline of his finances in a MPS application; FPR 9.7(4) requires him to ‘file a statement of his means’ on an application for an interim order (unless he has filed a Form E).

W describes a standard of living available to the super rich referring to the use of (i) two yachts, (ii) two private jets, and (iii) numerous expensive family properties around the world. H states that the jets, boats and properties were leased from the XYZ group (a company he founded and was a significant majority owner of). W asserts that her spending had no real restrictions (viewed by Peel J as an accurate description) until W issued a petition (W’s case) or she overspent on credit cards (H’s case).

Impact of jurisdiction dispute on MPS/LSPO applications

The fact of a dispute about jurisdiction does not prevent the court from making an interim maintenance award, although, if the jurisdictional basis of the applicant’s claim is doubtful, the court will be appropriately cautious when considering (a) whether such an award should be made and (b) the quantification thereof.

Peel J refers to Mostyn J in MET v HAT [2013] EWHC 4247 at [20]–[21] and his own judgment in MG v GM [2022] EWFC 8 at [6]. Both cases emphasise the importance of being cautious when jurisdiction is in dispute in circumstances where such an order may turn out to be based on a false premise.

NB. In MET v HAT Mostyn J considered that the wife’s case was dubious, which entitled him to consider the interim application ‘very cautiously’. By contrast, in MG v GM, Peel J found that it did not weigh too heavily.

In this case Peel J sets out a ‘very preliminary view’ that W has a sound prima facie case for establishing her habitual residence at the relevant time, and forum conveniens, and thus decides not to ‘adopt an overly restrictive approach’ to interim orders simply because the jurisdiction hearing is four months away, because it would only lead to a variation application if W’s case on jurisdiction succeeded.

LSPO

Peel J refers to:

• The applicable principles in relation to an application for legal fees funding as enunciated by Mostyn J in Rubin v Rubin [2014] EWHC 611 at [13].
• MacDonald J’s summary of the authorities relevant to the question as to the payment of costs already incurred prior to the issue of the LSPO application at [33]–[27] of DH v RH [2023] EWFC 111. Peel J states that there is no dispute that in principle an award for past costs can be made.
• Cobb J’s refusal in Re Z [2020] EWFC 80 to encompass, within the LSPO, the historic costs sought in relation to sums due to firms no longer instructed by the applicant. Peel J goes on to consider that costs in connection with proceedings already concluded may similarly not be readily recoverable, but costs reasonably and legitimately incurred by the present legal team in ongoing proceedings may, by contrast, be justifiably brought within the LSPO application because, as Cobb J said in BC v DE [2016] EWHC 1806 at [22]: ‘It is neither fair nor reasonable to expect solicitors and the Bar to offer unsecured interest free credit in order to undertake their work.’ Peel J takes the view that this aspect of LSPO jurisdiction should be viewed as part of the broad discretion available to judges when determining what award, if any, should be made. The essential question, as MacDonald J put it in DH v RH at [34], is whether ‘the court is satisfied that without such a payment the applicant will not reasonably be able to obtain in the future appropriate legal services for the proceedings’.
• Cobb J’s review of the authorities in BC v DE and adoption of the technique of applying a ‘notional standard basis of assessment’ to the claimed costs; a 15% deduction was adopted. Peel J states this approach has been adopted by other judges (e.g. Peel J in MG v GM where he applied a 30% discount) to provide a cross-check against the reasonableness of the sums sought.
• HAT v LAT [2023] EWFC 12, in which Peel J held that applying a notional reduction would be the wrong approach. Peel J states that to apply a standard basis of assessment discount may be a useful approach or cross check against the reasonable overall figure in some cases, but no judge in the reported authorities has held that it should be a formula of universal and automatic application. In some cases such an approach may leave a payee to fund the shortfall out of his/her own resources which may not be possible or fair; it may also be unfair to the lawyers who find themselves having to provide legal services at a significant discount.

On balance, Peel J considers that it would be appropriate to look at the sums sought in the round, accounting for the relevant factors in assessing an overall reasonable figure (rather than adopting a standard assessment discount other than as a cross-check). The ultimate question is, as s 22ZA says, one of reasonableness. It is considered unreasonable for W to use her own assets which are ‘modest’ when set against H’s vast wealth.

• W’s lawyers had confirmed in sworn written evidence that they are not prepared to continue to act for W unless their outstanding costs are met, nor would they act on a so-called Sears Tooth arrangement.
• No litigation lender was willing to lend monies; the absence of assets in W’s name in this jurisdiction is a significant barrier.

Peel J does not consider H’s proposal for W to re-mortgage her property to fund legal costs in circumstances where (i) it is her home and (ii) it is one of the few assets in this country.

Quantum. W’s costs are broadly reasonable and the parties’ projected costs are similar going forward (there is a level playing field). Peel J takes the view that there should be some discount to reflect the earlier resolution.

NB. H proposes a pound for pound order as popularised by Holman J (i.e. he will pay to W exactly the same amount as he pays to his own team for legal fees). Peel J rejects this considering W’s lawyers should be confident of the sums available to meet legal fees and such an order would risk argument, leading to further costs (notwithstanding careful scrutiny would be necessary and lead to further dispute). The scale of the wealth renders such a suggestion unattractive.

MPS

Peel J refers to:

• Mostyn J in TL v ML stating that the sole criterion is reasonableness which is synonymous with fairness. Mostyn J’s formulation was approved by the Court of Appeal in Rattan v Kuwad [2021] EWCA Civ 1.
• Peel J accepts what was said by Thorpe J in F v F [1996] 2 FCR 397 that, in determining reasonable needs on an interim basis, it is important as a matter of principle that ‘the court should endeavour to determine reasonableness according to the standards of the ultra-rich and avoid confining them by the application of scales that would seem generous to ordinary people’. Peel J rejects H’s position that the MPS should only cover emergency needs.

In going though W’s budget, Peel J takes into account that:

• H is a man of vast wealth, who falls into the super-rich bracket;
• from November 2021, when the parties separated, there was no restraint on W’s expenditure (in practical terms) until W issued her divorce petition; and
• W led a lifestyle both during and after the marriage available only to the super rich.

NB. Various deductions are made (i.e. W does not have security guards yet included them in her budget/one-week yacht rental at €499,000 is not tenable considering the family yacht is rented out for €150,000 per week).

Outcomes

LSPO. W is awarded £736,500 in respect of pre-application; present hearing; and to end of jurisdiction hearing. No LSPO is made in respect of costs from the end of the jurisdiction hearing to the first subsequent hearing after that, if W is successful in her jurisdiction application. This will, if applicable, need to be reconsidered at a later point.

MPS. W is awarded £2,200,000 pa directly payable monthly by standing order (reduced by W’s credit card spending between the date of the application and the present hearing). H also to meet a number of outgoings directly listed on the budget amounting to £1,673,930 (total outcome £3.9m vs W’s budget including costs of children of c.£5.1m).