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’.
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.’