DR v ES & Ors (Further LSPO Application) [2026] EWFC 15

Judgment date: 30 January 2026

https://caselaw.nationalarchives.gov.uk/ewfc/2026/15

MacDonald J. Hearing of W’s fourth LSPO application in long running financial remedies proceedings. MacDonald J dealt with questions of historic and future costs in circumstances where W had overspent on the budget set by a previous LSPO order.

Background

The parties married in August 2008 and separated in early 2021. Financial remedies proceedings commenced shortly thereafter, and a First Appointment took place in September 2021. The proceedings have since become extremely protracted, and are the subject of two previous reported judgments: DR v ES [2022] EWFC 62 in which Francis J heard the first of W’s four LSPO applications, and DR v ES & Ors [2024] EWFC 176, a preliminary issue hearing to determine the beneficial ownership in a company (‘Y Ltd’).

The asset position was relatively simple, with net assets of £18,008,203, the vast majority being in two property-owning companies, Y Ltd, in which H’s interest was determined to be 100% and valued at £6,667,330, and ‘X Ltd’, in which H held a one-third share valued at £14,340,324.

Three previous LSPO orders had been made in favour of W. In her fourth application, W sought a further LSPO in the sum of £726,246.46. £164,998.65 of this sum comprised outstanding historic costs as at 5 January 2026, including an excess of £62,099.25 on a budget set by the previous LSPO in May 2024. W contended the excess arose due to factors including but not limited to a failure by H to comply with that LSPO, adjournment and later vacation of a pFDR due to H’s failure to meet SJE costs, and delays by H in providing information to the SJE.

H argued that the previous LSPO had set a budget, and that to consider the factors relied on by W to justify the overspend would amount to a surrogate inter partes costs exercise. W’s lawyers, it was suggested, should have treated the previous LSPO as the limit of what they could spend in the absence of any variation application (which was not made).

The law

Applying Rubin v Rubin [2014] EWHC 611: given the need to avoid supplanting the principles of costs awards in CPR Part 44, LSPOs should only be awarded to cover historic unpaid costs where without such a payment the applicant will not reasonably be able to obtain in the future appropriate legal services for the proceedings.

Francis J in the previous LSPO judgment in the same proceedings had also determined that historic costs to solicitors should be provided where if a debt was not paid there was a ‘serious risk they will not continue to act’.

Cobb J in BC v DE [2016] EWHC 1806 drew a distinction between historic costs of concluded proceedings, and those reasonably and legitimately incurred in ongoing proceedings, recognising that a level playing field could not be achieved where the solicitor and client on one side were ‘beholden’ to each other by significant debt, with an abundance of litigation funding on the other side.

Conclusion

LSPO awarded which encompassed a portion of W’s historic costs to 5 January 2026. Having regard to a statement of evidence provided by W’s solicitor stating that his firm would not act on credit and would not be prepared to continue to act if bills remained unpaid (and noting particularly H’s and his parents’ prior litigation conduct), MacDonald J was satisfied that there was a serious risk W’s solicitors would not continue to act.

H had argued that it was not possible to identify the resources from which he would be able to readily raise funds in the required timescale, but a stated intention to meet with his bank shortly after the hearing to identify funds which could be raised by loan against his interests in order to clear his own outstanding costs counted against this argument in circumstances where there were net assets of £18m.

Whilst H was entitled to clear his costs using a loan against assets in his own name that were not yet subject of distribution, there would be an uneven playing field if H was to settle his outstanding costs from the monies raised while W could not do so.

W had exceeded the budget set by the previous LSPO, and whilst it could be seen as prudent to avoid the costs of a variation application, the corollary of this was the need to stay within the bounds of any LSPO budget granted, a LSPO not being a carte blanche to incur costs beyond those provided for in that order. In the circumstances, W was awarded a portion of the overspend, with £107,250 awarded of the £164,998.65 sought in respect of historic costs – this figure reached on a broad basis having considered the factors identified by W as justifying that overspend.

LSPO award

The LSPO awarded totalled £560,120 of which £107,250 was historic costs and the remainder costs from 5 January 2026 to conclusion of a final hearing. Funds raised by H to satisfy the LSPO were to be applied by H in order of descending priority on:

(1) security for MPS;

(2) LSPO provision;

(3) funding of H’s own legal costs

with a prohibition on use of the funds for any other purpose, and the funds to be paid in instalments with H not to pay his own legal advisers in greater amounts and/or sooner than he discharged his LSPO liability.