Property  

How an acrimonious divorce can take a financial toll

  • Describe some of the consequences of destructive behaviour in divorce proceedings
  • Identify what happens with spurious litigation
  • Describe the courts' views on divorce proceedings
CPD
Approx.30min
How an acrimonious divorce can take a financial toll
 Pexels/Burak Kostak

On September 18 2020 the Court of Appeal handed down its judgment on the matter of Rothschild and De Sousa (referred to for ease as the Rothschild case).

This was the outcome of Richard Rothschild’s appeal against an earlier judgement of the High Court delivered in December 2019. Mr Rothschild was the Appellant Husband, Charmaine De Souza the Respondent Wife.

The case highlights why it is crucial that parties litigate in a reasonable and proportionate manner within the financial remedy proceedings, which all too frequently follow on from the breakdown of their marriage.

A decision to embark upon frivolous and or malicious litigation is likely to be met with severe judicial criticism - and can have significant consequences for the overall division of the assets.

This was the case for Mr Rothschild, whose award at the end of the proceedings was heavily reduced because of his use of litigation tactics which had substantially reduced the assets available for distribution. 

The Rothschild case has been reported widely across the media, albeit in some cases with a gloss which does not quite accurately reflect the judgement.

The full decision can be found under case name RR v CDS [2020] EWCA Civ 1215. The Court of Appeal, affirming the first instance decision of Mr Justice Cohen, was highly critical of the husband and his approach towards the litigation.

Husband's conduct

The husband’s conduct (or rather, misconduct) of the proceedings was heavily reflected in the outcome of the case, and the assets which each party was entitled to receive. 

The costs incurred by the parties in respect of the proceedings in England at the time of the appeal were estimated to be more than £1m.

Marital assets had been sold during the court proceedings to meet a proportion of the legal fees, but it remained the case that both parties had considerable outstanding fees to be paid from any award received at the end of the proceedings.

A total of 13 costs orders were made against the husband during the litigation. The Court of Appeal agreed the costs paid and outstanding would have been a fraction of what they were but for husband’s litigation conduct. Dismissing the husband’s application, the Court of Appeal affirmed the view of Mr Justice Cohen: "We must be able to go forward in life without being excessively trammelled by debt. 

"In so far as the resources are not there to enable [Mr Rothschild] to have the same freedom, that is the inevitable result of statute requiring me to give first consideration to the children and because of the way that [Mr Rothschild] has acted since the breakdown of the marriage which has been vindictive and irrational, and which has caused a huge and unnecessary haemorrhage of money to pay for this litigation.

“It is obvious that this has been the most destructive litigation. There is no avoiding the fact that [Mr Rothschild] is very largely responsible for the situation that has arisen. Since the breakdown of the marriage he has acted destructively and throughout the litigation without any regard to the normal rules.”