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Xanthopoulos v Rakshina [2022] EWFC 30

Mostyn J gives reasons for: (a) refusing he husband's application for a further legal services payment order; and (b) Granting the wife’s application to be released from an undertaking that pending determination of the husband's financial claims she would preserve and not deal with, charge or in any way diminish a bank account (credited with £11 million). (c) Refusing to preserve the parties anonymity.

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The judgment begins with serious criticism of the parties for their case preparation which ends with the observation:

[T]he deliberate flouting of orders, guidance and procedure is a form of forensic cheating, and should be treated as such. Advisers should clearly understand that such non-compliance may well be regarded by the court as professional misconduct leading to a report to their regulatory body.

This criticism is followed by his noting that the parties had spent £5,401,503 in 18 months and a further £2.3million was contemplated. Mostyn J commented that this "is beyond nihilistic. The only word I can think of to describe it is apocalyptic."

The Legal Services Payment Order

The husband had previously been granted an order which he had overspent. His solicitors had come off the record on the day before the hearing. The judge began with the general propositions that:

i) A legal services payment order should only be made in respect of outstanding costs to current solicitors where, without payment, those current solicitors would likely cease acting for the party in question (i.e. so to ensure that that party can continue to access representation).

ii) The position is entirely different in relation to former solicitors as they have already ceased acting for the party in question (i.e. so payment of their outstanding costs has no relevance to the question of whether a party can continue to access representation).

As his solicitors had come off the record, they would simply be creditors. Any new solicitors would need to present a budget and make a further application.

The judge accepted that while it was possible to seek a payment where the basis of a previous LSPO had been undermined by a change of circumstances there might be a further payment it would be scrutinised carefully: Re Z (No 2) (Schedule 1: Further Legal Costs Funding Order; Further Interim Financial Provision) [2021] EWFC 72 - considered.

The judge also accepted that the court had jurisdiction to make an order to fund an appeal but it would be exercised extremely cautiously, particularly where permission to appeal had not been granted. However, any application would be considered against the sums already allowed and the consequences of previous overspending could lead to refusal. He was clear that funding the defence of claim by former solicitors was an interim lump sum and not LSPO and so could not be ordered.

Release from Undertaking

The wife was released from her undertaking so that she could fund her own litigation. The judge considered that it was necessary to show a significant change of circumstances: Birch v Birch [2017] UKSC 53 para 11 and she had done so.

Anonymity

Having warned practitioners in A v M [2021] EWFC 89 that he felt that financial remedies cases should not attract anonymity, he took the opportunity to explain why his researches confirmed that this was the correct course in a 60 paragraph exegesis.

He did direct that the children and their address should be anonymised.

He indicated that the rubric which should be used in financial provision cases (apart from child maintenance) is "This judgment was delivered in private. The judge hereby gives permission – if permission is needed – for it to be published" with any proviso then set out. [para 119].

Case summary by Nicholas O'Brien, Barrister, Coram Chambers

For full case, please see BAILII