Lazaros Panagiotis Xanthopoulos v Alla Aleksandrovna Rakshina

In a family appeal, the ordinary rule that the unsuccessful party pays costs does not apply automatically. The court must exercise its discretion by considering all the circumstances, including responsibility for costs, settlement offers, relative success and litigation conduct. A party may recover costs despite succeeding on only some grounds or obtaining less than the relief sought. The award may be substantially discounted for misconduct that increases the scope or duration of the appeal. Where an LSPO funds a proportionate appeal, the court may also award the costs of obtaining that order where the funded party succeeds in the application and on part of the appeal.

This was a costs judgment following an appeal from the Family Court decision of Sir Jonathan Cohen, reported at [2023] EWFC 50. The appellant husband succeeded on several grounds but lost on others and achieved a significant increase in the award, although less than he sought. The respondent wife had made no offer to settle and had unsuccessfully resisted the appeal.

The respondent sought £425,000, relying on the appellant’s litigation misconduct. The appellant sought his costs on the basis that he had achieved a substantially better outcome. The central issue was how the costs discretion should be exercised in a family appeal involving partial success, litigation misconduct and an LSPO.

Lady Justice King gave the judgment, with Lord Justice Moylan agreeing. The respondent’s application for £425,000 was refused. The appellant’s costs application succeeded in part, subject to a substantial discount for his litigation misconduct.

1. The automatic rule that the unsuccessful party pays the successful party’s costs does not apply to an appeal connected with proceedings in the Family Division under CPR r.44.2(3)(a). Costs therefore remained discretionary. The court had to consider all the circumstances under CPR 44.4 and the conduct matters identified in CPR 44.2(5)(a)–(d).

2. Although the general rule did not apply, the unsuccessful party’s responsibility for generating the successful party’s costs could often be the decisive factor. The court also considered the absence of any settlement offer by the respondent, the appellant’s partial success and the significant percentage increase in the award. The appellant’s only offer was contained in an unagreed bundle and exceeded £12 million.

3. The appellant’s litigation misconduct justified a significant reduction in the costs payable. The misconduct included numerous unmeritorious ancillary applications, which required the hearing estimate to be increased by half a day. The court noted that the misconduct was also reflected in the order made for the appellant’s future needs.

4. The appellant had received £175,000 under an LSPO, which Peel J considered adequate to conduct a proportionate appeal. That sum represented approximately 60 per cent of his total costs. Since he had succeeded in obtaining the LSPO and had gone on to succeed in part on appeal, the respondent was ordered to pay £175,000 towards his appeal costs and £17,378 including VAT for the LSPO application, payable within 14 days of sealing the order.

1. Court of Appeal (Civil Division): The respondent’s costs application was refused. The appellant was awarded £175,000 towards his appeal costs and £17,378 including VAT for the LSPO hearing.
2. Family Court: Appeal from the decision of Sir Jonathan Cohen, reported at [2023] EWFC 50.