The husband in a divorce dispute cannot pay his lawyers a pound without paying a pound to his wife’s solicitors, the High Court has ruled.
Mr Justice Holman said it was “intolerable and an affront to justice” that the man had paid £95,000 to his new solicitors “at the very time when he was already in arrears and getting further into arrears with his wife and her very patient and long-suffering solicitors”.
The judge said the facts showed a “grave picture of non-compliance” with court orders by the husband, including filing the Form E disclosure of financial means and making a series of interim payments to the wife.
He owes her £100,000 in unpaid maintenance and £130,000 in costs for her solicitors, Payne Hicks Beach.
Though his net wealth was around £34m, the husband said his assets were “illiquid and unrealisable”, which was why he not paid the outstanding sums.
But, Holman J noted, having parted ways with solicitors Vardags, he had paid his new firm, Stewarts, £95,000 a month before – and the firm had confirmed that the money had already been spent and that the husband was already in deficit.
The wife asked the court to make an order that the husband pay her £100 for every £1 paid to his own lawyers, failing which he would be debarred from being heard on the wife’s application for financial relief.
Holman J rejected this, saying “the rationale of such an order must be that of an equal or level playing field” and that a debarring order was too extreme a sanction.
The judge ruled: “There is an alternative approach which is clearly available to me.
“I will injunct the husband from paying any further money (whether for their profit costs or disbursements) to any firm of solicitors practising in England and Wales instructed by him (or any counsel instructed by him on a direct access basis) unless he pays an equal amount (i.e. pound for pound) to the wife’s solicitors towards satisfaction and discharge of the arrears and current instalments of legal services funding.”
He rejected the argument that this denied the husband the means of obtaining legal advice.
“I wish to stress very clearly indeed that it is not intended to deny, nor is it denying, him the means of obtaining legal advice,” Holman J said.
“As far as I am concerned, he can go straight out and pay £100,000 to Stewarts Law for further legal advice, the only condition is that he also pays pound for pound £100,000 to the wife’s solicitors.
At a hearing in April, the judge told Payne Hicks Beach – which at the time had extended credit of £200,000 to its client – that it had to “live with” its decision, rather than be paid back at that time.
He said: “The fact of the matter is that, in this family law field, prestigious firms of solicitors, practising here in central London, do very frequently make a decision to allow an element of credit to their clients on the assessment by them that the client will ultimately be in a position to pay the bill.”
Future costs were “a very different matter”, however, and he ordered payment of £250,000 to be averaged out over the following six months, meaning just over £40,000 per month.
At the most recent hearing – which took place in July but has only just been published – Holman J noted: “So far, to their credit, Payne Hicks Beach clearly have permitted the credit to be extended further, but there must inevitably come a time when even that prestigious firm has to say, ‘Enough is enough’.”