Case No. EWFC-89

to try to settle it. 90.The very first open offer made in the case was by the wife as late as 24 June 2021. She argues that she was disabled from doing so earlier because key disclosure was not made by the husband about the profits from the management company and his consequent investment made into Fund 2 until May 2021. But this did not prevent an FDR taking place in December 2020. Obviously, there was scope for an open negotiation to see if a deal in principle could be done from the moment that the FDR failed. The wife did not need to know the exact future value of the husband’s carry in Fund 2 in order to make a proposal in respect of it. The proposal would be formulated as a percentage – which is exactly what she later did.91.The husband did not make an open proposal until 16 July 2021. There is no good reason why he did not do so earlier. His offer was completely unrealistic and unreasonable. It proposed that the wife should be cashed out of the co-investment in Fund 2 for a paltry £160,000 notwithstanding that the value of the investment was worth €1.28 million. It proposed that the wife should have no share of carry whatsoever in either fund. It further proposed that the husband should have a call option exerciseable at any time to buy the wife out of Fund 1. This was not an example of reasonable and responsible open negotiation.92.The wife responded on 27 August 2021 with a revised offer. It was equally unreasonable. It proposed that she should receive 50% of the husband’s share of carry in Fund 1 and 40% in Fund 2. In effect she was arguing that 100% of the husband’s carry in Fund 1 and 80% of the carry in Fund 2 formed part of the marital acquest, notwithstanding that the lives of those funds stretched respectively for 4½ and 6½ years into the post-divorce future. It demanded that the Italian property should be sold. And, extraordinarily, given the scale of trust money behind her it proposed that the husband should pay her £235,000 per annum in spousal maintenance indefinitely. The claim was exorbitant in all its main aspects.93.At the PTR on 23 September 2021 the husband made an improved open offer. For the first time he offered the wife a share of the carry. Now that he had, to use Mr Webster’s metaphor, crossed the Rubicon, it was surely time for the wife to have engaged with this proposal; but she did not and appears to have dismissed it out of hand. She made no open counter-proposal then or at any point before the trial. Instead she ran up with her lawyers a further £161,000 of costs.94.This is not a reasonable way of conducting proceedings.95.In the following table I set out the main elements of the parties’ final open offers and the judgment of the court:96.Although the husband’s offer in respect of the Fund 2 co-invest was about £455,000 less than the present value of the wife’s half-share, that shortfall is more than matched by his spousal maintenance offer, and by not seeking a costs add-back. These two items represent a transfer of value from the husband to the wife of £475,000. The husband plainly succeeded on the controversy about the Italian property. Although his offer in relation to carry was less than the court awarded he was, at last, certainly firing at the right part of the target. 97.In my judgment the stance of both parties up to the PTR was equally unreasonable. There should be no order for costs referable to that phase of the proceedings. 98.However, the husband at the PTR made a reasonable offer which the wife appears to have intransigently rejected. At that point there was plainly an opportunity for a deal to have been done, but the wife’s refusal to negotiate propelled the parties to the expense, both emotional and financial, of a trial. In my judgment this amounts to conduct for the purposes of rule 28.3(6) and (7) and PD 28A para 4.4. 99.In my judgment, this misconduct must be marked by a significant costs penalty. The wife shall pay half of the husband’s costs from the PTR to the conclusion of the trial, which I assess at £38,580. This figure will be deducted from the lump sum of £1,807,000 that the husband must pay to the wife.100.Litigants have to understand that they must negotiate openly, reasonably and responsibly. This means they must pitch their claims in the area the court might award, and they must engage with bona fide open attempts to settle - especially in the run up to trial. If they do not, then they will suffer a penalty in costs. Anonymisation 101.Both parties have requested that this judgment be anonymised before it is placed on Bailii. 102.In my judgment in BT v CU [2021] EWFC 87 I said this at [113]:“However, it should be clearly understood that my default position from now on will be to publish financial remedy judgments in full without anonymisation, save that any children will continue to be granted anonymity. Derogation from this principle will need to be distinctly justified by reference to specific facts, rather than by reliance on generalisations.”In that case I acceded to a request for anonymisation because the parties had a reasonable expectation that the hearing would preserve their anonymity. I agreed that it would have been unfair to have sprung such a change of practice on the parties without forewarning. So here. I accept that the parties approached the hearing in the confident expectation that journalists would not attend and that the judgment would be anonymised. 103.I therefore grant the request for anonymisation. I ask counsel to agree an anonymised version of this judgment to be placed on the Bailii website 104.In step with the modern recognition of the vital public importance of transparency, my default position for the future will be to publish my financial remedy judgments in full without anonymisation, save as to the identity of children. Derogations from that default position will have to be distinctly justified.105.There seems to have been a certain amount of surprise caused by my decision in BT v CU to abandon anonymisation of my future financial remedy judgments. Views have been expressed that I have snatched away an established right to anonymity in such judgments. This is not so. I do not believe that there is any such right. My personal research tells me that before the 1939 – 1945 War, and indeed until much more recently, there was no anonymity in the Probate Divorce and Admiralty Division (‘PDA’), children and nullity cases apart, and even then only sometimes. For example, there is no example after 1858 of a first instance judgment in a variation of settlement case being published anonymously until as late as 2005 when N v N and F Trust [2005] EWHC 2908 (Fam), [2006] 1 FLR 856 was reported in that form. Even in nullity cases a general rule that they should be heard in camera was unlawful: Scott v Scott [1913] AC 417, HL. That case, far from being a paean to PDA exceptionality, is, in truth, precisely the contrary. It is a clear statement (to adopt modern metaphors) that the PDA was neither Alsatia nor a desert island: see Earl Loreburn at 447, where he succinctly stated: “… the Divorce Court is bound by the general rule of publicity applicable to the High Court and subject to the same exception.” See also, to the same effect, Viscount Haldane LC at 434, 436; Earl of Halsbury at 443; Lord Atkinson at 462–463; and Lord Shaw of Dunfermline at 469, 475 and 478–480. 106.It is therefore difficult to understand how the practice arose of routinely anonymising ancillary relief judgments given in the Family Division (the successor to the PDA) or in the Family Court proceeding at High Court judge level. So far as I can tell, it is traceable back to the provisions in the Matrimonial Causes Rules (‘MCR’) that made the Registrar the usual first instance judge - see for example rule 77(1) of the 1973 rules which stated that “on or after the filing of a notice in Form 11 or 13 an appointment shall be fixed for the hearing of the application by the Registrar.” The Registrar always sat in chambers. Rule 78(2) allowed an application to be referred to a judge, and rule 82(2) provided that the hearing of a referred matter “shall, unless otherwise directed, take place in chambers.” I believe that the earlier versions of the MCR said the same. It is to this banal provision that all the secrecy that has surrounded financial remedy judgments can probably be traced, although routine anonymisation of first instance judgments does not seem to have taken hold until the 1990s. So far as I can tell, the practice of anonymising judgments given by High Court judges is explicable only by reference to the hearing having been in chambers and behind closed doors. But that of itself would not explain the adoption of the practice as a chambers judgment is not secret and is publishable whether or not anonymised: see Clibbery v Allan and Another [2001] 2 FLR 819 at [24] – [33], [74], [117] – [118] and [150]. I have not been able to discover any statement of practice made at any time before Thorpe LJ’s judgment in Lykiardopulo v Lykiardopulo [2010] EWCA Civ 1315, [2011] 1 FLR 1427 (at [45] and [79]) explaining, let alone justifying, the convention (whenever it arose) of routinely anonymising almost all ancillary relief judgments given by High Court judges. That convention is very hard, if not impossible, to square with the true message of Scott v Scott which is that the Family Courts are not a desert island.107.That is my judgment. ______________________________