Judge's fury at ‘eye-watering’ Young divorce case costs

Topics: Costs, fees and funding,Family and children,Litigation,Courts business

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  • Mr Justice Moor

A judge has called for caps on the costs of disbursements incurred in divorce cases after a woman spent a ‘truly eye-watering’ £6.4m in legal and expert costs pursuing her former husband through court.

Mr Justice Moor (pictured) ruled that Michelle Young should receive £20m following her divorce from businessman Scot Young, despite her claiming he had a fortune of a ‘few billion’.

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But the judge described the total amount spent on the case as ‘completely unacceptable’ and held as proof there should be ‘rigorous control’ on the amount spent, in particular, on expert evidence.

Moor said: ‘It cannot be right that all the litigation funding is spent long before the final hearing, which is, on any view, the most important part of the entire litigation exercise. Maximum figures need to be placed on the disbursements incurred. If the solicitors and clients are not willing or able to do so, the court will have to impose limits.’

The case, described by the judge as the most complex he had ever dealt with, required 65 preliminary hearings followed by a final hearing that lasted 20 days.

Michelle Young had three separate arrangements during the course of the claim, the first with a funder called Harbour who provided her with £400,000 funding. She then obtained funding of £1m from Bracewell Law before reaching an agreement with ASCL and others for the sum of £2.7m.

She paid her first team of forensic accountants, FTI Consulting, £500,000 for investigating the costs and there remains a claim against her for a further £300,000 in costs.

Two further firms of investigators, Alvarez and Marsal and Guidepost Solution, then had to start from scratch and claimed £800,000 and £700,000 respectively in costs.

In total, she spent around £5m without getting to the final hearing or even having produced a final forensic accountant’s report, and her current solicitors and counsel have produced a further costs schedule for £1.6m.

Moor added: ‘So far as practicable, cases must be dealt with expeditiously and fairly yet this case has taken nearly seven years.

‘Even though this husband’s affairs were exceptionally complicated, the case has not been dealt with proportionally at any stage.’

Scot Young, who was self-represented in the final hearing, has already served six months in prison for contempt of court after refusing to reveal his assets.

Moor ruled he had assets of around £45m in March 2006, from which he deducted £5m for his debts. The judge said he realised Michelle Young would have difficulty in enforcing the order, but he hoped her ex-husband would see he is better off paying the sum ‘so he can then concentrate on rebuilding his life’.

Costs will be dealt with in due course, but Moor said he will take into account any failure to comply with an order of the court, any open offer to settle proceedings, whether it was reasonable for a party to raise or context an allegation, the manner in which responses were made and the financial effect of both parties.

Moor said Scot Young had neither complied with court orders nor made any reasonable offer to settle. He had also misled the court as to his finances ‘to a very significant extent’. But the judge added that Michelle Young had raised issues which were completely unfounded and a significant amount of work has had to be repeated due to her frequent change of solicitors and accountants.

Moor added: ‘Prima facie, I consider that the husband’s non-disclosure has been so great, that the wife is entitled to her costs on an indemnity basis of what I consider this case should have cost if it had been properly conducted.’

Catherine Thomas, from London firm Vardags, who represented Michelle Young, said: ‘There were 10,000 pages of court documents, 24 witnesses and assets spanning three continents, which really gives a sense of the scale and magnitude of the case.’

She added: ‘Michelle’s legal team believes our detailed approach to assessing Mr Young’s true wealth has been instrumental in securing this substantial payout for Michelle and her children. The verdict sends a strong message to those across the world seeking to hide their true wealth from their spouse – even the most intricate of financial arrangements can be exposed by specialist law firms.’

Readers' comments (28)

  • Let's just hope Mrs. Young does not now turn on her lawyers, of if she does that they are well, very well, insured.

    Judges should also realise that parties to such a case are not interested in financial reason, just in stretching their erstwhile loved ones on the rack of the Matrimonial Causes Act, 1973 . It's a sort of Spanish Inquisition of the 21st century. And it would seem Mr. Young more or less forced her to do so by his un-cooperative (pace Rev. Flowers though you seem to have hidden a thing or two) behaviour.

    And by the way who are we to say how the rich, or anyone else for that matter, should spend, nay waste, their money? It's theirs after all to do what they want with. When will couples with one marriage and two children be told not to bother with wills, just rely on the AEA 1925 as amended?

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  • Nice work, if you can get it.

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  • If there was still a Calderbank system in force we would see less waste and more sense.

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  • Calderbank? Don't make me choke. Calderbanks were a crude dispute resolution tool, used mainly by those who have no clue about how to help people resolve disputes. Their reintroduction would signal the abject failure of the legal profession to learn how to turn around the oil tanker that is family law solicitors' services that is heading for the rocks. Anonymous for a reason, clearly.

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  • What is not said in the article is that the parties children have seen their parents ( role models ) at war for 7 years, including father being imprisoned as a result. This is terrific training for their future lives. As to the merits of the litigation, what does it matter when large fortunes are involved???

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  • The question is, could more have been done to persuade the parties to mediate in this case?

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  • It wasn't about the money, it was about winning, revenge, getting the last word and a total disregard for proportionality of costs to the value of the dispute and the effect on the children. If there were 65 hearings, one presumes with 65 costs estimates, the court was well aware of the magnitude of the costs throughout. The problem is the whole litigation process has a fantastical logic of its own, a parallel universe of rules and processes that have no way of dealing with such feelings, beliefs and chemistry. The DR system cannot cope with such a situation it isn't designed for it.

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  • What a complete farce and true manifestation of greed by all concerned. The judge's comments were remarkably restrained given the extent that all and sundry seemed to have seen these warring parties as cash cows for 7 years. It is hard to believe the extent of the acrimony involved. It is clear that leaving this level of anger and deceit to be litigated in open court is not a satisfactory solution. Perhaps there needs to be a more inquisitorial approach by the bench in such extreme cases.

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  • Apparently the judge found her evidence "unreliable." She will be in the daily mail now complaining that she can't get the money and so the litigation will continue.....

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  • It happens lower down the scale too. A case where only a house worth £85,000 was involved, plus £10,000 cash. The husband owned the house before meeting his wife. The £10,000 was the value achieved from surrendered endowment policies which he was going to pay off most of the mortgage with. She was a physically abusive woman and the man had to leave her. She filed for divorce getting legal aid. He, on only £9000 a year did not qualify for legal aid! Her solicitor instructed a barrister (!?) and there were three hearings, because she was asking for 100% of everything. He eventually gave in when his costs had mounted to £6000 trying to retain at least a small sum. His own solicitor said, every time I go to court for £1000 more it will cost you £1500 in fees. Her legal aid bill was over £20,000. She got everything! How unfair is that? If both parties got legal aid they would be on an equal footing, but there should be very strict rules as to what the funds should pay for. A barrister in this case was totally over the top and put the wife at unfair advantage. A judge should be ruling that both sides are treated fairly and if one is being vengeful or malicious their funding should cease until they become more reasonable. This would most likely reduce overall legal costs and would be far fairer than making it even harder for people to get legal aid in the first place!

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