The ‘pound for pound’ order – dealing with a failure to comply in the divorce and family courts

One of the aspects of divorce that London top divorce lawyers are only too familiar with is the ongoing need to comply with the various orders of the court. To fail to comply with a court order is contempt of court and can be dealt with severely by the divorce and family courts. High net worth divorces often involve complex arguments over money and payments to be made as the divorce, child arrangements and financial settlements are finalised, but the reality is that anyone experiencing divorce may be faced with a situation in which their former partner has failed to comply with a court order. In a recent case, the court considered the ‘pound for pound’ order as a means of dealing with a husband’s continued failure to comply with various court orders regarding the payment of monies including his wife’s solicitors’ costs.

LKH v TQA AL Z – a husband’s defiance

By the time LKH v TQA AL Z (Interim maintenance and pound for pound costs funding) [2018] EWHC 2436 (Fam) reached Mr Justice Holman for the third time earlier in 2018, he had already had to deal with the husband’s non-compliance in a number of areas relating to the financial settlement of his marriage which had come to an end following a foreign divorce. He had failed to file the Form E, a vital component of the paperwork linked to financial settlement, familiar to any high net worth divorce lawyer, and had equally, and perhaps more seriously, failed to comply with orders relating to a number of payments. These included payments of £29,500 per month in interim maintenance to the wife, and payments of £40,000 per month in respect of his wife’s legal costs. In total, as a result of this contempt of court, the husband owed around £230,00 as at the date of the hearing.

He claimed that these payments were ‘illiquid and unrealisable’, tied up in assets worth around £34 million. However, at the same time as he had failed to pay this money to his wife, he had been able to realise £95,000 to pay to new divorce financial settlement solicitors in London who had been instructed within the month leading up to the hearing.

Considering the pound for pound order

From the tone of Mr Justice Homan’s judgment, it is clear that he was deeply frustrated with the husband’s non-compliance. This in itself should serve as a warning to any divorce solicitors in London that they should strongly advise their clients on the need to comply with court orders. In seeking to impose a sanction that would ensure that payments were made to the wife, the judge turned to the option of the pound for pound order, referring to the case of Mubarak v Mubarik, dating back to 2007, in which the wife was seeking to debar her husband from any further proceedings relating to the enforcement of an order for a lump sum payment of £361,000. In that case, the husband had “…been successful '… in going to any lengths to avoid the reality …' that the wife has achieved [the lump sum order]…” and had avoided making the payment to her, in contempt of court.

Although the judge refused to debar the husband, he did place the husband ‘on terms’ in respect of future litigation. One of those terms was the requirement that for every £1 he paid to his own solicitor, he paid £1 into a joint account in the names of the solicitors of both him and his wife, with the proviso that the contents of that pot would then be paid to the wife’s solicitors at the conclusion of a forthcoming hearing scheduled for December 2006.

The pound for pound order in LKH v TQA AL Z

In LKH v TQA AL Z, the wife had, as in the Mubarak v Mubarik case, sought to debar her husband, but the court felt this would be counter-productive. He did agree that the husband should be ordered to match every payment he made to his own solicitors with a payment to his wife’s solicitors to cover both arrears and future legal costs. The husband’s barrister argued that this would deny the husband access to legal advice, but the judge rejected that – the husband could access as much legal advice as he liked as long as he matched any payments to his own solicitors with payments to his wife’s.

Complying with court orders is fundamental

The case illustrates not only the importance of complying with court orders in divorce and family law proceedings, but also the powers of the court when faced with non-compliance. The pound for pound order is certainly a more imaginative use of the court’s powers, but nevertheless well within its jurisdiction in a case like this.

Behzad Sharmin of OTS Solicitors understand the sensitivities and difficulties associated with divorce for both partners and have extensive experience as divorce lawyers in London dealing with financial settlements. To discuss in confidence who we can help and support you at this difficult time, please call us on 0203 959 9123.