LKH v TQA AL Z (Interim maintenance and pound for pound costs funding) [2018] EWHC 2436 (Fam)

In July 2018, Mr Justice Holman injuncted a husband from paying any further money to any firm of solicitors practising in England and Wales instructed by him (or any counsel instructed by him on a Direct Access basis) unless he pays an equal amount (i.e. pound for pound) to the wife’s solicitors towards satisfaction and discharge of the arrears and current instalments of legal services funding under an earlier order of the Court.

In a judgment in back in April 2018, Holman J had directed that the husband pay the wife interim maintenance at £29,500 per month in addition to a costs allowance of £40,000 per month.

This went back to court on 24 July 2018 following a “grave picture of non-compliance”. The husband had not obeyed these orders and there were arrears of £230,000. He had also been required to provide full disclosure of his financial means by 27 March 2018, which he never did. The husband had said in his statement that he could not make the payments. He said that his net wealth was around US $45 million (or £34 million), but asserted that those assets were "illiquid and unrealisable." 

However, despite this non-compliance and pleading that he was not in a position to pay any money to his wife, the husband had been able to pay £95,000 to his own solicitors.

As a result, the Wife applied for a pound for pound order seeking £100 for every £1 the husband spends on his solicitors, in addition to a debarring order in the event of non-payment.

Holman J did not direct £100 for every £1 nor accede to the debarring order. He said: “I do not wish to create a situation in which this husband is debarred from being heard, whether in the financial proceedings or the Children Act proceedings.  Far from it.  A court always wishes to give maximum encouragement to both parties being fully engaged and heard so that the court has the maximum opportunity of arriving at the correct and fair overall outcome.” [para 19]

However, he did comment that it was "frankly, intolerable and an affront to justice that in the last month this man paid £95,000 to his new solicitors at the very time when he was already in arrears and getting further into arrears with his wife" [para 23]

To create a level playing field, he ordered that the husband was not allowed to pay any further money to any firm of solicitors unless he pays an equal amount (i.e. pound for pound) to the wife’s solicitors towards satisfaction and discharge of her legal fees.

The husband remained under the obligation to pay the full amounts ordered in April.

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