Costs News

06 January 2021
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News in brief - 07.01.2021

Costs barristers take silk

Two barristers well known in the costs world were among the successful applications for silk, announced shortly before Christmas: Judith Ayling of 39 Essex and Matthew Gullick of 3PB.

 

Judge refuses to make order to vary freezing injunction conditional on paying outstanding costs

An order to vary a freezing injunction to pay a £9,000 credit card bill should not be made conditional on the affected party paying an outstanding costs order, the High Court has ruled.

In Tolmie and Anor (Trustees of the Nicholas Savage Foundation) v Taylor and Anor [2020] EWHC 3271 (Ch), Jonathan Richards, sitting as a deputy High Court judge, said that imposing this condition “would be tantamount to treating the sums sitting in the frozen accounts as analogous to security available to the claimants in priority to other creditors”.

The claimants’ counsel submitted that the defendant should be expected to honour costs awards made by the court. “No doubt that would be true in a perfect world, but it is often the case that people cannot pay debts, including debts arising as a consequence of court orders,” the judge said.

“The claimants should not be in a better position compared with other creditors simply because they hold a debt arising from a court order and the freezing injunction has been made.”

He ordered that the credit card bill be paid.

 

Ministry of Justice removes mortgage debt cap in legal aid means test

The Ministry of Justice has changed the legal aid means test so that mortgage debt over £100,000 is no longer treated as an asset.

The move follows a legal challenge brought by the Public Law Project (PLP), with the Law Society agreeing to protect the claimant from costs. The change is seen as helping victims of domestic abuse in particular, with the claimant here a survivor of prolonged domestic violence from her ex-partner, having sought legal aid for private law family proceedings relating to her two young children when her ex-partner made an application to vary arrangements for their care.

The cap meant that only £100,000 of a mortgage debt could be considered when calculating the interest in a property. This artificially inflated the equity in the claimant’s home by around £180,000, treating her as having disposable capital which did not exist, and taking her over the £8,000 capital limit.

This was even though the claimant was earning a low wage, looking after the children and receiving Universal Credit, while there was very little equity in the home, which was mortgaged to around 95% of its value.

The £100,000 cap was introduced in 1994 and has never been increased despite the huge rise in house prices since, with the result that the average homeowner was excluded from legal aid, regardless of their ability to afford to pay for legal representation, the PLP said.

Law Society president David Greene said: “Nobody should be expected to sell their home and make themselves homeless in order to access justice. It is good news the Ministry of Justice is addressing this immediately through legislation.

“The issue of mortgage debt is just one of many flaws in the means test that we have been highlighting to ministers. Our research has shown the means test is preventing even families living below the poverty line from accessing legal aid. This must be dealt with in the present government’s review of the means test.”

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