Courts not “insurers of solicitors” in divorce cases where costs overrun

Divorce: Money spent was “beyond any reasonable comprehension”

It is not the role of courts to act as “insurers of solicitors” who “overshoot, let alone dramatically overshoot” legal services payment orders (LSPOs), a Family Court judge has said.

Sir Jonathan Cohen was commenting on an international divorce battle, where costs are approaching £9m and during which ex-husband Lazaros Xanthopoulos changed solicitors seven times, in each case “duplicating enormously the costs”.

An LSPO requires one party to a divorce to make payments to the other so they can obtain legal advice and representation. The order can be taken into account when financial orders are made at the end of the case.

Sir Jonathan said in his ruling that the “peak” of the ex-husband’s profligacy could be seen in the grant of an LSPO for £483,000 to his last set of solicitors in early February 2023, who, apart from providing two medical reports, had added “next to nothing” to the case.

The judge said this was not a “criticism of those lawyers”, who had “done a lot of work in a short time”, but ex-wife Alla Aleksandrovna Rakshina’s funds had been “significantly further eroded for no benefit”.

Sir Jonathan said the figures spent on costs were “beyond any reasonable comprehension”, with Ms Rakshina spending £4.27m on her own costs and Mr Xanthopoulos £4.15m.

All these costs had been paid by Ms Rakshina from her resources, apart from just under £900,000 which Mr Xanthopoulos owed previous law firms.

Sir Jonathan said it was “astonishing” that the ex-husband was indebted to five of his previous sets of solicitors by such a sum.

“After all, each gave a quote for the sum required and it has been provided either in full or to a very large extent by the making of a LSPO. If that proved insufficient, at any time it was open to the solicitors to apply for more.

“I cannot know exactly how it is that the solicitors got it so wrong, in three instances by very large amounts.”

The judge said one of the law firms had “thought it appropriate to write to the court stating that they intend to make a claim against” Mr Xanthopoulos.

“It is not the job of the court to act as the insurers of solicitors who overshoot, let alone dramatically overshoot, the sum provided by way of LSPO…

“If the solicitors run short of funds, then it is their duty to apply to the court for a further order. If they choose to carry on with their work and incur further fees, then they do so at their own risk.”

The judge said he did not intend to make “any provision for this liability”, if that was what it turned out to be.

“It is apparent that the financing of this case had become completely out of control. Quite how to stop such a situation occurring again is not straightforward.

“A court cannot know why solicitors and client part company. Once one firm of solicitors depart, unless a LSPO order is made, no new solicitors will come on board.”

Sir Jonathan suggested that judicial continuity would be “a huge advantage”, with proceedings in this case dealt with until the end of 2021 by “a range of different judges” before they came to him.

“Secondly, consideration might be given to being far stricter about how legal services payments are to be utilised in a case of a litigant who repeatedly breaches court orders. I would suggest that the provision of funds should be firmly tied to compliance with court orders.”

The judge said Mr Xanthopoulos had made 11 LSPO applications, “normally without a budget or one provided very late, and sometimes without a formal application ever having been issued”.

He had also breached “nearly every” court order that had been made, clocking up 35 breaches of 15 orders made at 12 different hearings.

The judge had not “the slightest doubt that this litigation would never have been conducted” by the ex-husband in the way that it had “if he was paying his costs from his own pocket”.

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