A recent case has highlighted the importance of properly negotiating in family finance matters.

In LM v DM, a wife brought proceedings for maintenance pending suit and interim periodical payments for the children. Mr Justice Mostyn said that the obligation to negotiate openly and reasonably is especially important in interim applications, which ought to be pragmatically settled in circumstances where by definition they do not make a final determination of the parties' positions.

The result of the case was clearly a win for the applicant wife. Although she did not achieve as much in quantum as she sought, the result was much closer to her position that the respondent husband's. She also succeeded on issues of principle which divided the parties. The judge agreed that there were aspects of the husband's case which were unreasonable and which reinforced his starting point that the wife should be awarded her standard costs of the application.

However, the judge found that the wife made no serious attempt to negotiate openly and reasonably beyond setting out her in-court forensic position in her witness statements. His impression was that the wife was determined to fight the application come what may.

He stated, “Litigants must learn that they will suffer a cost penalty if they do not negotiate openly and reasonably”. He added, “Accordingly, the applicant will be deprived of 50% of the award which I would otherwise have made in her favour. Therefore my order is that the respondent shall pay 50% of the applicant's costs of the applications to be assessed on the standard basis if not agreed”.

The case is a salutary lesson in how not to conduct family litigation.