Background
This judgment addresses consequential matters following a substantive decision by the Court of Appeal ([2026] EWCA Civ 962) that allowed appeals by the wife, husband, and a bank, ordering a full retrial of all issues in financial remedy proceedings. The original first instance judgment was by Sir Jonathan Cohen in Ahmad v Faraj [2023] EWFC 209, leading to a detailed order in December 2023. The present judgment became necessary because the parties could not agree on the terms of the consequential order, specifically concerning costs, the status of previous orders, and undertakings.
The court noted the “exorbitant expenditure” on costs to date, which had already reached approximately £6.5 million, and expressed considerable reluctance at the necessity of a full retrial. The need for this judgment underscored the deep-seated disagreements and the protracted nature of the litigation, which began in October 2020 and had lasted almost as long as the marriage itself.
The Court’s Holding
The Court of Appeal rejected the husband’s and the Bank’s attempts to set aside a previous Legal Services Payment Order (LSPO) and related appeal orders ([2025] EWCA Civ 468), reaffirming that the husband’s prior appeal against the LSPO had been dismissed and that his current efforts constituted an impermissible “alternative route” to challenge those decisions. The court also found no basis for the husband’s proposed undertaking not to seek recovery of sums paid under the LSPO, viewing it as a potential source of further delay and attritional expenditure.
Regarding the costs of the three successful appeals, the court ruled that the decision on costs would be reserved to the retrial judge at the conclusion of the financial remedy proceedings. This approach was deemed the only just course given the unusual circumstances and the potential impact of findings yet to be made in the retrial on the ultimate allocation of costs. Crucially, the court ordered that certain paragraphs of the 2023 Order, specifically those pertaining to spousal periodical payments, child periodical payments, school fees, and a net payment to the wife for various prior costs (paragraph 26), must remain live and enforceable, as they related to matters already concluded or essential ongoing provisions.
Key Takeaways
- The Court of Appeal will determine consequential matters after a full retrial order, particularly when parties cannot agree on costs and the validity of prior orders.
- Attempts to indirectly challenge or set aside Legal Services Payment Orders (LSPOs) and related appeal decisions that have already been unsuccessfully litigated will be rejected.
- Decisions on costs for successful appeals in complex financial remedy cases may be deferred to the retrial judge to ensure a just outcome aligned with the final resolution of substantive issues.
- Interim financial provisions (spousal/child periodical payments) and previously settled costs orders will generally be preserved, even when a full retrial is ordered for other aspects of the case.
- The court emphasized the critical need for expeditious case management and engagement in Alternative Dispute Resolution (ADR) to mitigate prolonged litigation and its associated financial and emotional toll.
Why It Matters
This judgment serves as a critical directive for managing the aftermath of complex, high-stakes financial remedy appeals in the United Kingdom, particularly when a full retrial is ordered. It underscores the judiciary’s intent to prevent parties from indefinitely relitigating settled procedural matters, such as legal services payment orders, thereby promoting judicial efficiency and finality in litigation. The decision to reserve appeal costs highlights a nuanced approach, recognizing that a fair allocation of costs often depends on the ultimate findings at the retrial, rather than merely the success of an appeal in procedural terms.
Furthermore, the ruling reinforces the protection of ongoing financial support for spouses and children during protracted disputes by maintaining interim payment orders. The court’s strong call for expeditious resolution and the encouragement of Alternative Dispute Resolution (ADR) also send a clear message to litigants and legal practitioners about the need to manage costs and achieve timely closure, especially in cases that have spanned many years and accrued significant expense.