Lessons for Lawyers: Xanthopoulos v Rakshina

Rebecca Alexander an Associate at  FLiP summarises the lessons learnt from the recent case of Xanthopoulos v Rakshina (led by FLiP Director David Allison), a long-running case concerning financial provision following a divorce in Russia (Part III MFPA 1984, the “Part III Application”).

This article was first featured in The Legal Diary on 28 April 2023 and can be found here. 

Lessons for Lawyers: Xanthopoulos v Rakshina [2023] EWFC 50 by Rebecca Alexander of Family Law in Partnership

Judgement in this long-running international financial remedy case was handed down on 4 April 2023 by Sir Jonathan Cohen. It contains warnings for litigants and their solicitors alike.

Both parties are Russian nationals with the former husband also having Greek nationality. My firm, Family Law in Partnership, advised the former wife. The former husband engaged 7 separate English law firms to act for him through the proceedings at different stages.

Despite the current geopolitical situation, it is quite possible for Russian individuals to litigate in England and, unless an individual is sanctioned, the current position is that a UK lawyer is able to act for them.

The key developments relevant to English law in this case are:

1. the impact of a Russian post-nuptial agreement;
2. the impact of the former husband’s litigation conduct; and
3. Legal Services Payment Orders for costs during the litigation.

The Russian Post-nuptial Agreement

The parties had executed a post-nuptial agreement in Russia entirely in accordance with strict Russian law and procedure. It was therefore found to have been freely entered into by the parties entirely voluntarily and with knowledge of the financial situation. Sir Jonathan Cohen stated that “it is not for the English court lightly to overrule what the former husband chose” and in this case the post-nuptial agreement was a decisive factor.

Litigation conduct

It is now well established under English law that litigation conduct can be relevant to the final award. In this case, the former husband changed solicitors on 7 occasions (thereby increasing costs materially), made 11 applications for Legal Services Payment Orders and breached nearly every order that was made. This impacted significantly on his award.  Future litigants must be advised that litigation conduct will have consequences on a final order and will reduce what the offending party receives, which may be less than their needs. 

Legal Services Payment Orders

The former husband made 11 applications for Legal Services Payment Orders. He also had outstanding liabilities of £900,000 with firms of solicitors who overshot the sums granted by the orders. No order was made to provide these solicitors with their overspent costs and the judge made clear that it is the solicitors’ duty to apply to the court for a further order if they run out of funds. Following this judgment, solicitors must advise litigants making such applications cautiously, and overspend at their own risk.

Sir Jonathan Cohen’s judgement on these issues are new developments which warrant careful consideration by the legal community.