Divorce proceedings described as ‘long, bitter and extortionately expensive’ have been remitted after the husband appealed against case management orders that would have enabled a litigation funder to ‘play a full part as an equal party’ in a financial remedy trial.

During divorce proceedings between Lauren Simon and Paul Simon, Integro Funding Limited, trading as Level, agreed three loans for the wife. These now amount to more than £1m, including interest.

A consent order was sealed following a financial dispute resolution appointment which included an agreement that the wife receive a life interest in a residential property but ‘no free capital or income in settlement of her claim’. The agreement’s effect ‘was to deprive Level of the prospect of repayment [of] any of the sum to which they were contractually entitled’.

The consent order was set aside and there arose ‘extensive case management orders…designed to drive the matter forward to a financial remedy trial in which Level would play a full part as an equal party’.

The husband appealed.

Lady Justice King, in Simon v Integro Funding Limited trading as “Level” and another, noted the previous judge had approved the draft consent order ‘‘entirely without knowledge’ of Level’s party status.

Describing the case as a ‘procedural quagmire’, she said: ‘The judge was in error in making directions to order a full financial remedy hearing and should first have listed for determination the outstanding application for a consent order to be made in the terms agreed between the parties and only made any necessary directions for the purpose of such a hearing.’

The 20-page judgment said: ‘It will be very rare for it to be appropriate for a lender to have party status in relation to any aspect of financial remedy proceedings. Such intervention would usually be achieved by limited participation at the stage when the court considers whether to approve a consent order.

‘As Holman J said, the lender’s interest is limited to such sum as would satisfy its contractual debt. Where the issue arises other than through a proposed consent order, the wide case management powers of a judge are again likely to allow for limited participation by a lender, for example by way of a preliminary finding of fact hearing.

‘I find it difficult to envisage circumstances where the full participation of a lender in financial remedy proceedings would be justifiable, but I would not go so far as to say that the evidence of collusion, and the procedural circumstances in any particular case could never make it appropriate.’

The Court of Appeal allowed the appeal after finding the judge was in error in ordering a new full financial remedy hearing, with Level participating as a party. But ‘the judge was otherwise entirely correct in his approach to this difficult and unusual case and accordingly the appeal is otherwise dismissed’.

The case will be remitted to Mr Justice Peel, the lead judge for financial remedy cases. Level will remain a party for the outstanding application by the husband and wife for a consent order to be made in the terms agreed at the FDR.

Lord Justice Popplewell and Lord Justice Moylan agreed.

 

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