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Financial Remedy Update, February 2022

Sue Brookes, Principle Associate and Nicola Rowlings, Professional Support Lawyer, at Mills & Reeve LLP consider the most important news and case law relating to financial remedies and divorce during January 2022.

Sue Brookes, Principle Associate and Nicola Rowlings, Professional Support Lawyer, at Mills & Reeve LLP

As usual, the update is divided into two parts.

A. News

The Family Proceedings Fees (Amendment) Order 2022

This Order amends the Family Proceedings Fees Order 2008 (S.I. 2008/1054) ("the Fees Order"). Articles 3(2), (3)(a), (8) and (9)(b) amend the Fees Order to reflect changes in terminology resulting from the Divorce, Dissolution and Separation Act 2020. 

The Family Procedure (Amendment) Rules 2022

The Family Procedure (Amendment) Rules 2022 amend the Family Procedure Rules 2010.  The provisions make necessary changes to existing primary and secondary legislation consequential upon the Divorce, Dissolution and Separation Act 2020. 

Divorced women face unstable retirement as pensions left out of settlements

Only 15% of divorcing couples include pensions in their financial settlement, according to a survey of Which? members carried out in November 2021.

Review of the Standard Family Orders announced

Mostyn J has announced that all standard family orders will be reviewed in the next few months with a view to issuing updated volumes of both money and children orders by the summer of 2022. HHJ Kambiz Moradifar will lead on the children orders and HHJ Edward Hess on the money orders.

Family mediation scheme to help thousands more parents

On 16 January 2022, the Ministry of Justice announced that an additional £1.3million will be made available for the family mediation voucher scheme. The extra investment in the initiative means more than £3million has been ploughed into the scheme since its launch in March 2021. 

New Efficiency Statement

Mr Justice Mostyn and HHJ Hess, have issued a new statement on the efficient conduct of financial remedy hearings proceeding in the Financial Remedies Court below High Court judge level, following recommendations by the Farquhar Committee. The statement is in addition to that issued in 2016 for High Court judge level cases. Templates for a composite case summary and schedule of assets and income, a document setting out the primary principles of the Financial Remedies Court (previously titled the Good Practice Protocol) and a revised lead judge job description have also been published.

Balancing transparency and confidentiality 'really difficult' says McFarlane P

Greater transparency is necessary for the public to have confidence in the family justice system but balancing openness with confidentiality will be 'really difficult', the President of the Family Division has told MPs today. The full story is in the  Law Society Gazette.

B. Cases

Maughan v Wilmot [2021] EWHC 3592 (Fam) (08 October 2021)

This is the latest instalment in a long running case involving what Mostyn J refers to as one of the worst examples of vexatious conduct he has ever encountered.

On 22 October 2019, Mostyn J had imposed a general civil restraint order against Mr Wilmot, who alleged that the various orders which had been made against him, dating back as far as 2001, were without jurisdiction. The Court of Appeal had, in 2013, rejected Mr Wilmot's grounds of appeal and Lloyd LJ had formally certified his claims as being totally without merit. However, Mr Wilmot had continued to persist with his allegations, leading to further hearings before Mostyn J in 2014, 2016, 2018 and 2019, which is when the general civil restraint order had been made.

This latest instalment is an application by Ms Maughan and her solicitor, pursuant to FPR paragraph 4.10, for an extension of the general civil restraint order. FPR paragraph 4.10 gives the court power to extend the duration, if it considers appropriate to do so, for up to another 2 years on any given occasion.

As per Ashcroft v Webster [2017] EWHC 887 (Ch), under the Civil Procedure Rules there is no presumption of continuance of an expiring civil restraint order and there has to be evidence that an extension is appropriate. The court must take into account all of the circumstances, not just the defendant's current conduct but also that which led to the order being made in the first place. Any conduct after the original order was made must be viewed through the prism of conduct which led to it being made.

Taking into account all of the circumstances, Mostyn J noted this case is, in all respects, outside the norm and no aspect of Mr Wilmot's conduct could be described as reasonable. He had no hesitation in granting the extension for another two years. He also made separate orders in relation to two applications which Mr Wilmot had mounted without the court's permission and, whilst noting permission an order may not be strictly necessary, for completeness he ordered that Ms Maughan's solicitors could come off the court record and, if necessary, they could disclose documents and orders made within these proceedings to their insurers.

Ms Maughan sort costs of £16,301, the vast majority of which related to the solicitors' costs dealing with emails in and out to Mr Wilmot. Mostyn J concluded, with specific reference to the character and disposition of Mr Wilmot, this is a case where costs should be awarded on an indemnity because the claimant can demonstrate a circumstance which takes the case out of the norm. The award was therefore £15,485, i.e. 95% of the costs schedule, with the discount reflecting what would happen if it went to detailed assessment.

CW v CH (MFPA 1984 Part III: Interim Applications) [2022] EWFC B1 (10 January 2022)

The husband and wife were both Nigerian nationals.  Following the breakdown of their marriage, they signed a deed of separation in Nigeria which was then turned into a financial order.  Decree absolute was made in 2019.  A year later, the wife moved to England (to live in a property owned by the husband) and was granted leave to bring an application for financial relief following a foreign divorce under Part III Matrimonial and Family Proceedings Act 1984.  In those proceedings, she was seeking £2.765 million for a property in London and £312,000 a year in maintenance.  However, she also sought an order for interim periodical payments (£9,755 a month) and a costs allowance in respect of legal fees (£111,910 towards costs already incurred and c.£84,000 for her future costs).

The husband contested the court's jurisdiction to deal with the interim applications, principally on the basis that he said that the wife had not passed the threshold for leave under s.13 MFPA 1984.  Meanwhile, the wife contended that not only was the husband unable to challenge the fact that leave had been granted because he had not applied for a set aside but the court itself was precluded from considering the merits of her substantive application when dealing with an interim application. 

Mr Recorder Allen QC concluded that the court was entitled to consider the husband's challenge to the merits of the wife's application and that to suggest otherwise was contrary to natural justice.  Turning to the interim applications themselves, Mr Recorder Allen QC was satisfied that the wife had a need that she could not meet from her own resources, was not reasonably able to obtain a loan and that a Sears Tooth arrangement was not feasible.  Given the husband could meet the interim claims, an order was made that he pay the wife £5,300 a month in interim maintenance and c.£84,000 for her future costs.  However, her claim for a contribution to discharge her incurred but unpaid costs was refused.  The wife had already incurred costs of £371,000, of which £198,000 remained unpaid.  £240,971 had been incurred prior to the first inter-partes hearing which Mr Recorder Allen QC described as "disproportionate"; he noted that she had chosen to incur those costs despite there being doubts as to the merits of her claim.