LKH v TQA AL Z (Interim maintenance and costs funding)

Interim maintenance is directed primarily to current and future liabilities. It should not ordinarily be used to make capital provision disguised as maintenance by funding substantial historic debts.

Legal funding by way of maintenance is directed to future legal services. Historic unpaid costs may be funded only very sparingly, where the evidence shows that without payment the applicant will be unable reasonably to obtain appropriate legal services in the future. Equality of arms may justify substantial prospective funding where one party can litigate with expensive representation and the other cannot. Such funding must be ring-fenced for future costs and must not discharge pre-existing liabilities.

The applicant wife sought interim periodical payments in proceedings under Part III of the Matrimonial and Family Proceedings Act 1984 following a foreign divorce. She sought provision for herself and the children, payment of existing debts, and funding for legal costs.

The respondent husband did not attend the hearing and had provided no Form E. The court therefore proceeded on a summary and impressionistic basis. The central issues were the appropriate level and form of interim maintenance, whether historic debts and unpaid legal costs should be funded, and whether prospective legal funding was required to secure equality of arms.

1. Interim maintenance. The court ordered general maintenance of £26,000 per month, together with the monthly cost of the driver's salary and employment expenses once ascertained. The assessment was necessarily interim and took account of the parties' very high standard of living while reducing claimed expenditure to reasonable figures.
2. Historic debts. Maintenance primarily covers current and future liabilities. Funding substantial non-urgent historic debts would amount to impermissible capital provision disguised as maintenance. Provision was made for the wife's contractual Barclays repayment and certain ongoing property-related payments, but not for general repayment of existing debts.
3. Historic legal costs. Section 22 ZA of the Matrimonial Causes Act 1973 concerns an amount enabling the applicant to obtain legal services for the proceedings. It is directed towards future services rather than services already obtained. The court accepted the approach in Rubin v Rubin [2014] EWHC 611 (Fam), [2014] 2 FLR 1018, that historic unpaid costs should be funded only very sparingly. No order was made for the wife's existing solicitors' debt, although the issue could later be addressed through costs or capital provision.
4. Prospective legal funding. Equality of arms and justice required funding for the wife's future children and financial proceedings. The court ordered £250,000, averaged at £40,000 per month for six months, to be paid directly to her solicitors. The money was to remain in the client account except for appropriate disbursements and fees, with regular accounting to the husband and repayment of any surplus. It could not be used to discharge costs incurred before the order.
5. Costs. The wife had achieved considerable success despite receiving less than she sought. Her costs of the application were summarily assessed at £12,870 inclusive of VAT, subject to a £7,500 set-off, leaving £5,370 payable within 14 days.

First-instance decision. No appellate history is stated in the judgment.