The recent case of Young v Young has proven to be an interesting one for family law, both in terms of the complexity of the case itself and the sheer effort that went in to trying to resolve it.
The end to the proceedings finally came last month in a High Court decision that awarded £20 million to Mrs Young as a settlement against her husband. In order to reach that point, the parties involved generated some 10,000 pages between them and 24 witnesses were required, including high profile figures including the Arcadia Group CEO Philip Green. Assets involved in the negotiations were spread across three continents, adding to the immense difficulty of trying to separate the two parties fairly under the law.
What is interesting about this judgment is that it was made despite the fact that Mr Young had claimed to be broke, having lost all his money and been left with only debts of £28 million. Despite this, the judge found that Mr Young actually had “£45 million hidden from this court.” Having accepted that this was the case, the judge said “as against that, I must deduct £5 million for his debts, making a net total of £40 million." It was on the basis of this assessment of Mr Young’s assets that the £20 million settlement was awarded to his ex wife – regardless of his claims to be penniless.
Another key factor in this case was the issue of costs. Since the introduction of the Jackson Reforms this year there has been an increase in attention on the proportionality of costs in civil litigation and what this might mean for the parties. Although there has been little guidance provided on the subject of cost proportionality, in the Young v Young case Mrs Young had incurred more than £6 million in costs in order to obtain the settlement and this was described by the judge as ‘completely unacceptable.’
Despite this, there was an acknowledgement by the court that there was a reason for this eye watering figure, which was essentially that over the seven years that the case had run, Mrs Young had been forced to change legal advisors and instruct a large number of new experts as a result, mainly due to the fact that she had little resources with which to pursue the litigation.
Under the Jackson Reforms, where costs incurred are not proportionate – even when they have been incurred reasonably – they may not be recoverable. This has opened up the debate on whether the effect of the Jackson Reforms will actually be to make it much easier for defendants to be obstructive during litigation.
A refusal to agree a settlement, a lack of cooperation, and other ‘courtroom tactics’ could well now be employed in order to slow litigation down and to increase costs, which in the end may not be recoupable – leaving a claimant significantly out of pocket if the costs are out of proportion to the claim amount, even if the claim is successful.
Further guidance on this is likely to be provided by the Court of Appeal in the near future, but for now the issue remains rather open.