Court of Appeal Deliberates Complex Costs Issue in Xanthopoulos v Rakshina Family Law Appeal

Citation: [2024] EWCA Civ 100
Judgment on

Introduction

In the case of Lazaros Panagiotis Xanthopoulos v Alla Aleksandrovna Rakshina, the Court of Appeal reviews the costs associated with Family Court proceedings upon appeal. This case law summary examines the judicial reasoning applied to the determination of costs and the broader legal implications it carries, particularly concerning litigation conduct and the respective awards for costs in the context of family law appeals.

Key Facts

The case involves an appeal from the Family Court to the Court of Appeal (Civil Division) regarding a costs order. The appellant, Lazaros Panagiotis Xanthopoulos, succeeded in his appeal to some extent, leading to a substantial increase in the quantifiable award. However, there were findings of litigation misconduct on his part. The respondent, Alla Aleksandrovna Rakshina, opposed the appeal and applied for a costs order against the appellant seeking the return of funds paid under an LSPO order, along with her own costs of the appeal.

Philip Cayford KC and William Tyzack represented the appellant, while Lucy Stone KC and Helen Williams represented the respondent. The appeal was heard on 1-2 November 2023, with the judgment on costs being handed down on 8 February 2024.

Costs Orders in Family Division Appeals

The court notes at [2] that the general rule endorsing the unsuccessful party to pay the costs of the successful party, as directed by CPR r.44.2(3)(a), does not automatically apply in the context of family division appeals. The judge’s discretion remains pivotal, as iterated in Baker v Rowe [2010] 1 FLR 761, highlighted at [6], where the unsuccessful party’s responsibility for the successful party’s costs is considered a significant factor.

Litigation Conduct

Litigation conduct plays a crucial role in the assessment of costs, as reflected in [3] and [10] of the judgment. The court emphasizes that misconduct can influence the determination of costs under CPR 44.4 and the constituents of conduct outlined in CPR 44.2(5)(a)-(d). Findings of litigation misconduct against the appellant are accounted for in the cost determination.

Offers to Settle

The court also considers whether there were offers to settle before and during the appeal proceedings ([2] and [8]). The absence of such offers from the respondent and the appellant’s only offer being substantially higher than the final award may weigh against them in the court’s discretion on costs.

The LSPO made by Peel J allowed the appellant to receive £175,000 to fund the appeal ([12]). This sum accounted for approximately 60% of the total costs of his appeal, playing a significant part in the costs debate.

Outcomes

The Appeals Court denies the respondent’s claim for costs and grants part of the appellant’s claim. The respondent is ordered to pay the appellant:

i) £175,000 towards his costs of appeal, a sum already employed ([14] i)), ii) £17,378 inclusive of VAT for the LSPO application costs within 14 days of the sealing of this order ([14] ii)).

The court’s decision carefully balances the success of the appellant in the appeal against the respondent’s full opposition and the appellant’s litigation misconduct. It results in offsetting the award for costs the appellant is granted.

Conclusion

In this ruling, the Court of Appeal underscores that in family law appeals, cost orders are not bound by the same rules as other civil litigation and are influenced by multiple factors including litigation conduct, offers to settle, and the outcome of the appeal. The judgment in Xanthopoulos v Rakshina provides a nuanced application of these principles, reflecting the court’s tailored approach to assessing costs in circumstances where the general rule of CPR r.44.2(3)(a) is inapplicable. Moreover, the decision showcases the court’s discretion in weighing various aspects such as the success achieved on part of the appeal, absence of settlement offers, and the impact of litigation misconduct on costs. This analysis serves legal professionals with insight into the court’s framework for determining costs in the specific context of Family Division appeals.

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