Someone! Do Something About Costs! The Single Lawyer Solution
Published: 26/09/2022 14:29
In an appendix to his judgment in the ruinous case of KSO v MJO & Ors  EWHC 3031 (Fam), in which the parties managed to expend all but about 28% of the net assets in costs, Munby J returned us to Dickens’ excoriating passage in Bleak House:1
‘“For many years [ ] the matured autumnal fruits of the Woolsack – have been lavished upon Jarndyce and Jarndyce. If the public have the benefit, and if the country have the adornment, of this great Grasp, it must be paid for, in money or money’s worth, sir.”
“Mr Kenge,” said Allan, appearing enlightened all in a moment. “Excuse me, our time presses. Do I understand that the whole estate is found to have been absorbed in costs?”
“Hem! I believe so,” returned Mr Kenge. “Mr Vholes, what do you say?”
“I believe so,” said Mr Vholes.
“And that thus the suit lapses and melts away?”
“Probably,” returned Mr Kenge.’
Six years later in J v J  EWHC 3654 (Fam), Mostyn J bemoaned at  that ‘the mantra “something must be done” is repeated time and again, nothing ever is’. And at  ‘In my judgment the time has come when the law-makers in this country, whether they are legislators or judges, must stop saying something must be done and actually do something. The first thing would be to insist [ ] on fixed pricing for cases, whether they are ancillary relief cases or anything else.’ As to why, quoting Lord Neuberger of Abbotsbury in his lecture to the Association of Costs Lawyers on 11 May 2012:2
‘Hourly billing at best leads to inefficient practices, at worst it rewards and incentivises inefficiency. Moreover, it undermines effective competition in the provision of legal services, as it “penalizes ... well run legal business whose systems and processes enable it to conclude matters rapidly. [ ]” It also penalises the able, those with greater professional knowledge and skill, as they will tend to work at a more efficient rate. In other words, hourly billing fails to reward the diligent, the efficient and the able: its focus on the cost of time, a truly moveable feast, simply does not reflect the value of work.’
And later in the same speech Lord Neuberger said:
‘That no-one has suggested a viable alternative is something which needs to be remedied, and the sooner the better. An approach to litigation costs based on value-pricing rather than hourly-billing is one which urgently needs to be worked out and applied. Rather than treating time as the commodity which is being sold, we should be adopting an approach where skill and experience are the commodities which are sold.’
A further 8 years on, via Peel J’s decisions in M v M  EWFC 41 (94% of the parties’ asset base consumed in costs) and in Crowther v Crowther & Ors  EWFC 88 (312% expended in famously ‘nihilistic litigation’), and a host of other cases in which the level of costs expenditure has been condemned, what has really changed? Nothing, at least according to Mostyn J’s widely-publicised recent case, Xanthopoulos v Rakshina  EWFC 30 (12 April 2022). Despite the rule changes: (1) requiring orders to record costs incurred and to be incurred (thanks to FPR 9.27(7)); and (2) underlining the obligation on parties to negotiate openly and reasonably (FPR PD 28A, para 4.4), costs ‘continue to go up and up’. There is a familiar call to arms at :
‘In my opinion the Lord Chancellor should consider whether statutory measures could be introduced which limit the scale and rate of costs run up in these cases. Alternatively, the matter should be considered further by the Family Procedure Rule Committee. Either way, steps must be taken.’
The standard practitioner response to the difficulty of setting an accurate, proportionate, budget (yet alone fixed fees) is to point to variables in litigation, or in the process of collating financial disclosure, beyond their control. Costs estimates are, anecdotally, all too often provided on something close to a best-case scenario, not least because contingencies (such as the litigation conduct of the other side) can be difficult to quantify. This ‘circumstances beyond our control’ get-out is a perfectly arguable point if you take as your point of departure that legal advice has to be provided on a two-sided basis.
But it is now clear that it doesn’t.
And so, dear reader, at long last to the point of this article. Couples can, and increasingly are, being advised from the outset together as to what constitutes a fair outcome in their circumstances, enabling them to settle at the earliest stage. Precisely because a joint process involves neither litigation nor communication back and forth between opposing legal teams over financial disclosure collated in adversarial fashion over extended timeframes, it is entirely possible to offer such services for a fixed fee. Lawyers can therefore feel comfortable to propose such an arrangement. Couples can budget.
Here we must declare an interest. Through The Divorce Surgery,3 we have been offering barrister-led advice on a fixed fee basis for some years now. To summarise our ‘One Couple One Lawyer’ model:
- Couples are met first individually to screen for suitability (not every case will be suitable, for obvious reasons) and to enable preparation of the fixed fee quote, which is itself essentially dependent on the likely complexity of the financial disclosure exercise and seniority of the barrister needed to advise.
- Then, the couple is assisted by our in-house solicitor to give financial disclosure on an open basis, by an exchange of Forms E. This collaborative disclosure process takes on average 6 weeks. In all but the simplest cases, they will meet with their appointed barrister to review each other’s disclosure before deciding what further evidence, including expert evidence, is required. If further expertise is required, letters of instruction are prepared for the couple and suitable single joint experts identified.
- Once any gaps are filled to their mutual satisfaction, both attend an advice session together. The advising barrister will then explain what a court would be likely to do in their circumstances and what the practical consequences might be, all on a privileged basis.
- Lastly, the oral advice is finalised in a detailed written document, also privileged, sent out shortly afterwards, to be used as an easy-to-follow roadmap to settlement and to prevent any possible disagreement as to the nature of the advice given.
- The fixed fee for the entire service is agreed with the clients before they commit and remains fixed, regardless of lawyer hours worked. As above, the level of fee will depend on the complexity of the issues but, at present, our average fees range from £5,000 to £10,000 plus VAT per person for the whole process.
This might fairly be likened to an evolved form of Early Neutral Evaluation (ENE), with lawyer support throughout the financial disclosure process, but distinct in that it does not have any adversarial features at all, either at the financial disclosure or advice stages. And most importantly, in our experience at least, it seems to work. At the last count, about 90% of couples utilising the service have settled afterwards, either in line with the advice given or very close to it. Granted, the customer base is self-selecting to some degree. But the early signs are very encouraging.
Across the profession – and consistent with the recent changes to divorce legislation – joint advice is slowly but surely moving into the mainstream. Objections as to conflicts and/or potential regulatory difficulties are being addressed such that a number of solicitor providers have entered the market to offer ‘one couple’ services of their own, notably Simpson Millar, Withers and Family Law Partners to name but a few. At its conference in Birmingham in May 2022, Resolution announced the development of its ‘Resolution Together’ programme. There appears to be a real appetite amongst family law professionals to embrace this new form of working.
None of this is to say that joint advice will be suitable for everyone, plainly it won’t. There will always be a hard core of cases for which independent, solely-instructed legal advice will be indispensable, for example where there are allegations of hidden or dissipated assets, or where jurisdiction is in dispute, or where there is an abuse dynamic in play. Most of us practising in the field would, however, recognise that such cases are in the small minority and can usually be readily identified during a robust screening process. From those suitable cases, the costs saving in using a fixed fee joint process rather than an adversarial model is enormous. As an extreme differentiator, the Appendix to this article sets out costs reported in the last 12 months as a percentage of net assets.
And costs are, of course, far from the only issue. We know from the second Farquhar report4 that in 2019 for the whole country (bar London), the average length of proceedings which concluded at the Financial Dispute Resolution (FDR) stage was 55 weeks and the average length of proceedings which went to a final hearing was 84 weeks. The equivalent London figures were 117 weeks (just over 2 years) to FDR and 160 weeks (just over 3 years) to final hearing. Aside from the financial cost, research has shown the huge emotional cost impacting litigants’ own mental health5 and their children’s,6 and litigants’ performance at work.7 As HHJ Hess notes in the recent Review of the Operation of the London Financial Remedies Court:8
‘There must, of course, be a large but unmeasurable number of miserable human experiences tied up in these statistics ’
So, in the spirit of pioneers (and not mercenaries, thank you very much) gallantly answering a call to arms from a desperate judiciary, unheeded over many years, we now propose that something be done: specifically, a radical shift and cultural pivot towards making joint advice the default first step in financial remedy practice. The provision of a court room at public expense and the ability to be heard in contested litigation should depend on having satisfied that requirement, absent some disqualifying feature of the kind referenced above. Cases will settle, busy court lists will reduce (so prioritising judge time for the truly meritorious), public money will be saved and – back to the point under discussion – family finances will be protected from the costs of litigation.
As to who should be doing the advising, there is now a growing pool of providers of joint advice to couples. This should be encouraged to grow further. As to accreditation, it is suggested that any ‘one couple’ provider should simply be required to be regulated by the Solicitors Regulation Authority or the Bar Standards Board, have proper processes in place for screening and ensure that the solicitors or barristers doing the disclosure process, advising and screening are experienced in financial remedy cases (it is understood that the Resolution Together programme will not require specialist training). For a joint service to work, couples need to engage in it meaningfully, so a joint conference on the brink of issuing while strongly opposing positions are taken in the background will rarely stand a chance of success. Any ‘one couple’ process needs to be just that: a process, and not a tick box.
Plainly, this would not be a small change. For context, there is of course the specific CPR power to compel (judge-led) ENE at CPR 3.1(2)(m), see Lomax v Lomax  EWCA Civ 1467, as part of its general case management powers. There is no FPR equivalent.
Instead, we have the thin gruel of: (1) FPR 1.4(2)(f), whereby the court must actively manage cases, including ‘by encouraging the parties to use a non-court dispute resolution procedure if the court considers that appropriate and facilitating the use of such procedure’; and (2) FPR 3.4(1), codifying the court’s powers to adjourn proceedings if ‘appropriate’:
‘(a) to enable the parties to obtain information and advice about, and consider using, non-court dispute resolution; and
(b) where the parties agree, to enable non-court dispute resolution to take place.’ [emphasis added]
But besides the parties in Recorder Allen QC’s much-publicised decision in WL v HL  EWFC B10, in which the court kept a close eye on the progress of their mediation from afar, which of us has any experience of FPR Part 3 in action? Anecdotally at least, very few. In Mann v Mann  EWHC 537 (Fam),  2 FLR 928, Mostyn J’s prescription was to invite amendment of (b) above to delete the first four words (so as to provide consistency with the equivalent CPR provisions), but 7 years later the invitation remains outstanding.
In view of the lack of progress in controlling costs to date, it is strongly arguable that the traditional requirement to proceed with non-court dispute resolution (NCDR) only at the pace of the most unwilling participant has had its day. As Norris J put it in Bradley & Anor v Heslin & Anor  EWHC 3267 (Ch), , in a different context:
‘I think it is no longer enough to leave the parties the opportunity to mediate and warn of the costs consequences if the opportunity is not taken. In boundary and neighbour disputes the opportunities are not being taken and the warnings are not being heeded, and those embroiled in them need saving from themselves.’
So what comes next? Attempting to set out a definitive code for the future is a fool’s errand without wider consultation, but in the interests of starting the conversation we could:
- Abolish mediation information and assessment meetings as the sole NCDR gateway to court applications and introduce an option for couples to elect to attend screening meetings with joint legal advice providers instead.
- Extend the mediation voucher scheme for the same purpose.
- Pending any substantive changes to the Form A, institute a pre-action requirement for the prospective parties to exchange a simple form certifying: (a) whether joint legal advice has already been taken; or (b) the joint legal advice provider has certified an exemption applies (including on the grounds of affordability). The form should display appropriate warnings that invalidly claimed exemptions may give rise to costs penalties and/or adjournment of the substantive proceedings. Both parties’ forms can then be lodged with Form A.
- The standard directions on issue should repeat the warnings as to possible cost penalties and/or adjournment.
- At the first appointment hearing the court should, in every case, enquire into whether any exemption has been validly claimed on each side and record its finding on the face of its order. If the court determines that joint advice should have been taken, and therefore that proceedings have been prematurely issued, the court should simply re-list the first appointment at a later date to enable joint advice to take place in the interim, making any appropriate costs orders.
- Restore means-tested legal aid, but only for joint legal advice and only for a fixed fee. It is suggested that doing so would not only meet the state’s responsibility to better restore access to justice, but do so in a way which is proportionate and affordable to the taxpayer. We think it might be possible for the baseline cost to the taxpayer of providing joint legal advice to two legally aided spouses to be fixed at as little as £3,250 plus VAT per couple. Since the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) took effect in April 2013, there has been a 30% increase in the number of cases in which neither side has legal representation,9 with obvious consequences. The stark reality is that many litigants may be issuing simply because a family judge is the first lawyer they can afford to see. This is by no means an original observation, but funding early joint legal advice will save money.
It is hoped that widespread use of early joint advice will, of itself, restrict the volume of cases entering the court system to those who need to be there.
But could more be done? Might a summary of the joint advice from the single lawyer be made open and available to the judge at the outset and in the course of any future litigation between the couple? In principle, it is easy to see how doing so might prove an effective brake on free-spending litigation: the parties could expect to be asked to explain and justify why they propose to depart from their joint advice. Decisions on LASPO costs could take into account the joint advice – a litigant wishing to argue against the single joint advice should have the task of justifying why a LASPO costs order should be made. Then later following judgment, success or failure in bettering the identified bracket could be made a relevant factor in the assessment of costs – an unsuccessful party should ordinarily expect to bear the costs unnecessarily incurred by rejecting the single joint advice if it has turned out to be correct. The attraction to the judge hearing the case would be plain and the existence of joint legal advice should be a significant inhibitor to ongoing litigation. All this needs careful thought, given the obvious privilege implications, but one way of introducing this as a concept might be to enable the couple to opt-in to such a course at the outset.
This is plainly an ambitious shopping list, and to realise it in full would engage both our political masters and the Family Procedure Rule Committee. But pending reform, much can be done meanwhile, even utilising the existing architecture:
- Implement a much more vigorous approach to FPR Part 3, supplemented by comprehensive Practice Guidance as to the court’s expectations in this regard and/or an authoritative High Court judgment. The court’s duty under FPR 3.3(1) is to consider whether NCDR is appropriate ‘at every stage in proceedings’. Litigants should become accustomed to being asked, at every hearing, what has been done or not done in that regard. The court should stand ready to adjourn cases where the parties appear insufficiently informed, or advised about, relevant NCDR options (FPR 3.4(1)(a). Borrowing from the approach in WL v HL, litigants should expect to have to inform the court as to progress made between hearings.
- Expect judges to take a more proactive role in identifying and informing the parties about appropriate NCDR options, in every case and at each hearing, in accordance with the requirements of paragraph 7 of the FRC’s newly-minted Primary Principles document,10 by which judges are to be:
- Be ready to consider the parties engagement with NCDR as relevant to the assessment of costs under FPR 28.3(7), specifically: ‘(a) any failure by a party to comply with these rules, any order of the court or any practice direction which the court considers relevant’; ‘(d) the manner in which a party has pursued or responded to the application [ ]’; and ‘(e) any other aspect of a party’s conduct in relation to proceedings which the court considers relevant’.
- Consider how, as a profession, we can better celebrate settlement, so that it becomes a marker of excellence and career advancement. The court’s objective to make litigation a last resort must not be at odds with the way professional achievement is recognised. Each month, a list of notable settlements could be published. If a legal team feels their case qualifies, they should submit, along with the consent order and D81, a one-page document explaining why the settlement should be recognised, for instance due to complex points of law or evidence. Judges could then choose to publish those summaries which merit recognition, naming the solicitors’ firms and counsel involved, but otherwise anonymising names and identifying features. There should be the opportunity to apply to a High Court Judge for recognition in the most complex cases.
‘ever mindful of opportunities for the parties to engage in attempts to reach settlement of some or all of the issues out of court by whatever means are suited to the case – Arbitration, Mediation, The Divorce Surgery and Private FDRs – and will encourage parties to explore the available possibilities.’
It is respectfully suggested that Lord Neuberger’s ‘viable alternative’ has arrived. Something can be done, if we want to do it.
Appendix – examples of costs reported in the last 12 months
|Date of judgment
|Total net assets
|Combined costs on both sides
|Costs as % of net assets
|VV v VV  EWFC 41
|Xanthopoulos v Rakshina  EWFC 30
|W’s case: c. £17m
H’s case: c. £317m
|£5.4m (with projected costs of £7m–£8m)
|H’s case: 3%
W’s case: 47%
|WC v HC  EWFC 22
|Re A (Schedule 1, Overspend, Costs Clawback)  EWFC 21
|Recorder Chandler QC
|c. £13.8m (N.B. less relevant as Schedule 1)
|MG v GM (MPS LSPO)  EWFC 8
|W’s case: £100m
|W’s case: 1%
H’s case: 3%
|Collardeau-Fuchs v Fuchs  EWFC 6
|£917,982 (and £288,700 projected to FDR)
|P v Q  EWFC B9
|A v M  EWFC 89
|E v B  EWFC 90
|Recorder Chandler QC
|W’s case: £5.6m
H’s case: £2.5m
|W’s case: 7%
H’s case: 15%
|Crowther v Crowther & Ors (Financial Remedies)  EWFC 88
|LF v DF (Financial Remedy: Appeal: Costs Debts in a Needs Case)  EWFC B50
|HHJ Mark Rogers
|Azarmi-Movafagh v Bassiri-Dezfouli  EWCA Civ 1184
|King, Moylan and Newey LJJ
|S v S  EWFC B71
|E v L  EWFC 60