Moor J. Refusal of a Hadkinson order during substantive proceedings. LSPO granted for proceedings and for overseas litigation.

Background

H is exceptionally wealthy with assets held overseas of more than £1bn. W applied for a Hadkinson order for H’s failure to engage with proceedings, and an LSPO to further fund her litigation both here and overseas. H’s conduct was described by Moor J ‘as bad a case of non-compliance with court orders as this court has ever seen’.

W sought funds for her outstanding costs, costs of the litigation moving forward to FDR, and further funds for overseas litigation in pursuit of H’s assets held in other jurisdictions. W was unable to obtain any further litigation funding, her current lender having already refused an extension of the loan, and a further funder having refused to do so. Her solicitors had also refused a Sears Tooth agreement and would have to cease to act if her costs remained unpaid.

Held

1. Moor J reaffirmed his judgment in Young v Young [2013] EWHC 3637, that a Hadkinson order has no place in proceedings prior to a final order being obtained. It is impossible for the court to exercise its jurisdiction under s 25 MCA 1973, if a party is forbidden from playing any part in the substantive proceedings.
2. The court was satisfied it was appropriate to make an LSPO; H clearly had the means to meet the costs of W’s litigation. There had been some disclosure identifying £1m in a UK bank account which would enable W to enforce any order made.
3. Given H’s non-compliance, Moor J accepted W’s submission this was ‘exceptional’ and was not a case for payment of the LSPO by instalments, and instead should be paid by a single lump sum.
4. Assessing the LSPO value sought by W, Moor J awarded W her outstanding costs in the sum sought (£190k), noting W’s costs had been increased by H’s failure to engage in the proceedings, such that had he done so, W’s litigation loan of £204k would have been sufficient to litigate past the FDR. Further, the court accepted W’s figure of £185k for ongoing costs to FDR without scrutiny, because the ‘abject failures of the respondent’ made it difficult to quantify exactly what steps W would need to take to enforce orders of the court to ensure an FDR could take place.
5. Whilst it was appropriate to provide W with a fighting fund for overseas litigation as part of the LSPO, Moor J reduced the figure because the costs of litigation in Switzerland (£74k) against an asset of £500k was disproportionate in the context of c.£1bn in an account in Monaco.

W’s Hadkinson order was refused. W was awarded £375k for her litigation in England, and an additional £175k to fund overseas litigation.