Last year, one of the UK’s most tumultuous divorce cases finally reached its end. The Young v Young ( EWHC 3837) divorce case resulted in Michelle Young being awarded an astounding £20 million settlement, with her former husband also asked to cover the £5 million she had spent on the case.
The stakes were high and, as the outcome shows, the case itself was an incredibly expensive affair for both parties. While the fairness of the case has been cause for debate amongst many in the legal community and the public, it’s the immense costs of the case that have attracted the most attention.
The total costs of the case were £6.5 million. Much of this was accessed via a third party funding arrangement that Ms Young had secured with funders. The costs of the case, as well as the protracted funding arrangement, have been as much of a talking point for many people as the case itself.
Ms Young believes that she had received justice, although her award falls short of what she had originally aimed for. Explaining the case to the media, she claims to have “made a stand for women” and believes that the law should be changed “to protect women like me with children by men who conveniently find they have no assets when they want to go off with a younger woman.”
Her case depended on third party funding from three different sources. The third party funding behind Ms Young’s case totalled £4 million, allowing her to pay for four forensic accountancy teams, 65 preliminary hearings, over 10,000 pages of court documents, 13 legal teams, and a worldwide search for her former husband’s assets on three different continents.
The case took seven years to reach its final hearing and by the time it was heart, its funding had been spent in its entirety, largely on expert evidence. The judge issued a stern statement regarding the costs of the case, noting that litigation funders needed to take a more careful approach to funding large divorce cases.
His exact word were: “It cannot be right that all the litigation funding has been spent before the final hearing, which is, on any view, the most important part of the entire litigation exercise.”
“Maximum figures need to be placed on the disbursements incurred. If the solicitors and clients are not willing or able to do so, the court will have to impose limits.”
“Without such restraints, litigation funders will be put off supporting these cases for ever.”
The judge had already remarked on the luck of Ms Young, whose lack of security made it remarkable that she had managed to gain £4 million in third party funds. Because third party funders lose their entire investment in a case if it fails, their losses are potentially immense in a risky, uncertain divorce case.
This risk was indicated in Ms Young’s case by the ending of her first third party funding agreement. When the funder left the case, they claimed that they would return to focusing solely on commercial cases in the future due to the easier risk calculations.
In order for divorce cases to be appealing to third party funders, they would likely need to involve a significant settlement. Most third party funders are uninterested in disputes worth less than £1 million. With legal aid cuts reducing funding choices for divorcees, it is becoming much more difficult for many would-be divorcees to deal with the immense costs of a difficult divorce case.
Because of this, a growing number of would-be divorcees are turning to different, more affordable choices. Mediation is growing in popularity. The Young case is an interesting one, securing funding far beyond what is possible for most would-be divorcees. In this way, it may be the obvious exception that proves that divorce funding does give people the opportunity to pursue justice.