The financial cost of a divorce “battle”
A wealthy couple have spent over £100,000 in legal fees fighting over which party will claim ownership of a £1.1m flat in London. It was eventually agreed that the Wife would pay the Husband £300,000 for his share of the property however, in the summer of 2020 a fire engineer inspected the flat and found that it did not comply with cladding laws that came in to force following the Grenfell Tower fire in 2017 and that as a result, the property is worth nothing pending the safety issue being resolved. Judge Hess noted that it was unclear exactly whose responsibility it was to resolve the matter and said “Who is to blame for this? Who will pay for this? Are the freeholders to blame?… It is early days to reach a conclusion that the Government will come to everybody’s rescue or when this might be.”
As a result, Judge Hess ordered that the Wife could delay paying the sum of £300,000 to her ex-husband for 3 years to avoid getting in to debt whilst the cladding issue was resolved. The parties would then have to re-convene and determine the property value after 3 years.
Whilst the cladding issue was a very unique issue within these proceedings that does not affect the majority of divorcing couples, the issue of costs escalating between battling couples is unfortunately a very common issue.
“It is very sad for the objective observer to witness two educated, intelligent and resourceful individuals being so unable to compromise their differences that their collective activities risk mutual self-destruction.” Judge Edward Hess
It is a reminder of the importance from the outset for couples to assess exactly which assets and liabilities comprise the marital pot to be divided between them, and the value of those assets. It is also essential to consider alternative dispute resolution (ADR), for example mediation, to determine whether a settlement can be reached amicably and without having to engage in long and costly court proceedings. Whilst not all parties are on amicable terms at the end of a relationship, in order to avoid protracted proceedings and the risk of spending a disproportionate sum on legal fees in comparison to the assets available to be divided, it is important to perform a costs-benefit analysis and consider whether a compromise could lead to each party obtaining a higher settlement rather than incurring further costs.
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