The cost of ancillary relief

District Judge Roger Bird reports on a big money case revisited and looks at its future implications on smaller family actions

Dart v Dart [1997] 1 FCR 20, CA is one of the best-known recent 'big money' cases.

The parties are American.

The husband inherited a great fortune derived from manufacturing foam cups.

On the breakdown of the marriage, the husband petitioned for divorce in this country.

The wife applied for ancillary relief and was awarded a lump sum of 9 million and a house.

She had sought the house and 122 million (half the husband's fortune).

The order failed to beat the husband's offer.

Moreover, the wife had unsuccessfully challenged the jurisdiction of the English court to entertain the divorce proceedings, causing considerable expense to both sides.

Not surprisingly, she was ordered to pay the husband's costs.

Stamina

One might have thought that, after such a lengthy and expensive legal encounter, the Darts and their lawyers would have retired exhausted from the forensic battlefield but such hopes would have been premature.

Nearly six years after the conclusion of the appeal the assessment of the husband's costs was still unresolved.

In October 2001, a costs judge made three decisions to which the husband's advisers took exception.

First, he reduced counsel's fee for settling replies to a questionnaire from 14,250 to 750.

Secondly, he disallowed the husband's accountants' fees of 30,000.

Thirdly, he rejected travel costs of the husband's accountants to the Cayman Islands.

The husband appealed.Mr Justice Bennett, sitting with assessors, (see [2002] All ER (D) 319) dismissed the third limb of the appeal but allowed the other two on the basis that the judge was 'plainly wrong'.

The background to the first issue was that the wife had served a detailed questionnaire challenging the husband's wealth and the various routes by which it came to him and the past expenditure of the family.

He had pleaded the 'Thyssen defence' (ability to pay any order the court could conceivably make) and declined to answer in detail.

She insisted on it being answered in detail and threatened to appeal to the House of Lords and so, reluctantly, the husband complied.

Counsel was instructed to settle the document and was engaged for 57 hours, incurring that 14,250 fee.

The reply was backed by 19 pages of schedules and 35 ring binders containing 7,000 pages of documents.

The costs judge held that the drafting of the husband's answers did not justify the use of professional help; the husband was being asked to provide basic information; the task of bringing out the facts was not lawyers' work; these were not costs in the action but costs of being a billionaire; and the husband should have got the court's sanction before incurring the costs.

Mr Justice Bennett said the questionnaire was not a standard request for routine information and the task of replying was indeed lawyers' work.

It would have been wholly unreasonable to expect the husband to have collated, marshalled and presented the information in answer to a questionnaire which itself had been drafted by lawyers on behalf of the wife.

These were not the costs of being a billionaire; the husband was an individual, not a corporation.

There was no way in which the husband could have obtained the sanction of the court in advance.

As to the accountants' fees, the costs judge had held that the data analysis of expenditure and preparation of the main report was not lawyers' work; it was things clients do for themselves, and he disallowed much of the 'donkey work' of the junior staff.

Mr Justice Bennett said that the question which had to be asked was whether this expenditure was reasonably incurred.

He had no doubt that it was.

This was a complicated and difficult case with accountants on both sides.

A reasonable latitude must be given to experts as to the mode of their operation.

This did not mean that accountants could randomly incur unreasonable expenditure but this was work of junior staff which was to form the basis of a report by a partner.

Questioning change

Clearly, cases of extravagant wealth are outside the day-to-day experience of most family lawyers, but there are some points arising out of this case which are worth discussing, even if we come to no clear conclusions.

The first is, simply, that this set of facts could not (or certainly should not) happen again.

Before 1996, a party seeking answers to a questionnaire might have to apply to the court for an order but the procedural changes since then mean that now the court, on a directions appointment, exercises much more control over what is and what is not allowable than was the case even seven or eight years ago.

Questionnaires are scrutinised much more rigorously and it seems certain that the wide-ranging questions which the husband was required to answer would not now be allowed.

But whether the husband could now get away with the 'millionaire's defence' may be the subject of some debate.

If the yardstick of equality has to be applied to all cases, (even if only to be rejected) how can the court apply it without knowing the amount of the total assets, even to the nearest million?

No prior sanction for fees

Could the husband now have obtained prior sanction for his counsel's fees? After all, it may be argued that one of the duties of the court at a first appointment is to manage the case and it is not unknown for judges to limit the charges which an expert witness may make.

It seems improbable that this could be extended to lawyers' fees, because the primary decision the court would make is whether or not a particular step (for example, answering a questionnaire) should be taken.

In making this decision the court will have regard to the costs which are likely to be incurred and so, having decided the point, it would be unnecessary to say anything about the cost.

In principle, there could be no objection to counsel settling the questionnaire, provided there was no duplication of costs; the hourly rate of counsel might well be less than that of the solicitor.

For the avoidance of doubt it must be said that the solicitor would have to act as a conduit of information only; clearly it could not be permitted that both solicitor and counsel did the same work.

Leave experts alone

The expression of opinion about the experts' fees is instructive.

Once having instructed (or permitted the instruction of) experts, they have to be allowed to decide how to conduct themselves, subject to reasonable limits.

In this case it was clearly thought that it was reasonable for the partner giving the report to delegate preparatory work to junior staff.

District Judge Roger Bird sits at Bristol Combined Court Centre