Wife is ordered to pay £100,000 from £750,000 lump sum. The figure would have been higher if not for the husband’s own misconduct.

In a recent case, a High Court judge has ordered a wife to pay a portion of her husband’s legal costs in a divorce claim due to her litigation misconduct.

In VV v VV [2022] EWFC 46, Mr Justice Peel said that, in the circumstances, it would not be unfair to “invade” her needs-based award to an extent.

At an earlier hearing, H was ordered to pay W £750,000, of which £237,000 was to clear her liabilities, which mainly comprised her unpaid legal costs.

H had already paid £400,000 of W’s costs.

H then sought a costs order against W for £450,000.

Though the starting point for costs in financial remedy proceedings is usually that each party should bear their own costs, the judge stated that here “I am satisfied that it is appropriate for W to make a contribution towards H’s costs”. 

H’s maximum offer made to W at the time of trail was £400,000 (having first offered £30,000). This award would effectively be nil once legal fees were taken into account.

The judge had described as “deplorable” H’s failure to comply with his obligation to give full and frank disclosure in relation company accounts.

The judges said “It seems to me that a significant proportion of the costs incurred related to disclosure issues, for which H must bear considerable responsibility,” the judge said. “W’s estimate is that it accounted for 60% of her costs. These matters point in W’s favour on the costs dispute.”

On the other hand, W had sought more than £6m from H and she had also failed on two “critical” evidential issues which lay at the heart of the case.

First she failed to prove a significant period of pre-marital cohabitation, while H established that W was guilty of misconduct “in that she had caused him financial losses, probably running into tens of millions of dollars, by reason of having prevented H from from dealing with company assets  following the Company listing. 

Peel J observed: “Had those issues not been so hotly contested, the case would have been a relatively straightforward needs-based claim, and the costs on both sides would have been vastly reduced. The fact of those disputes probably rendered the case impossible to settle.”

The judge concluded that it would be “unfair for H to bear the burden of all his costs as well as all of W’s costs” and that W should “not be entirely protected from costs consequences”.

He explained: “Their combined costs are over £1.2m, yet at the end of it all W achieved an award of £750,000, far below her open proposal, and having failed on either the cohabitation or the conduct issues.”

He made a costs order against W of £100,000 to be set off against the lump sum payment of £750,000.

“How she trims her needs to take account of this costs order will be a matter for her. She will still have total assets of about £1m and, for example, her income fund of £450,000 (£150,000pa for three years) might be reduced to £350,000.

The judge said “That is a consequence of her litigation conduct. The figure for costs might well have been higher had it not been for H’s litigation misconduct.”