James v Seymour: What’s all the fuss about?
The family law world has recently taken stock of a new judgment of Mr Justice Mostyn, titled James v Seymour [2023] EWHC 844 (Fam). The decision concerns an appeal of the judgment of Her Honour Judge Vincent, who herself heard a variation application brought by Ms James in respect of the historic award of spousal and child maintenance.
The appeal judgment has been widely discussed and there are a number of factors that are worth exploring. This article restricts itself to two key takeaways which the authors anticipate will form a cornerstone of family law practice moving forward.
Background
It is worth taking a moment to understand the case’s factual background as it underpins some of the key elements of the judgment.
It was a short marriage beginning in 2010 and ending only two years later, albeit benefitting from the birth of two children, aged 10 and 12 at the time of Mr Justice Mostyn’s involvement. Mr Seymour is a banker earning in the region of £400,000. He is therefore outside the jurisdiction of the CMS service for the purposes of calculating child maintenance (as indeed he was at the time of the original order). Ms James is an unemployed but highly educated journalist by background.
They reached a consent order in 2014 under which Ms James was awarded a lump sum equating to roughly two thirds the value of the family home, payable over a period of up to 10 years. She was also awarded spousal maintenance of £52,000 per annum, due to taper to £40,000 per annum in 2024 and child maintenance was assessed at £10,000 per annum per child. From a global maintenance position, Mr Seymour was therefore liable to pay his ex-wife £72,000 per annum for 10 years, tapering down to £60,000 in 2024, £50,000 upon the eldest child turning 18 and ceasing upon the youngest turning 18 and finishing secondary school (around 2030).
The remaining history is beset by litigation. There were various children proceedings arising out of Ms James’ decision to unilaterally relocate the children within England and then subsequently to retain them in Pakistan without the court’s permission. At the time of the appeal the children spent time with Mr Seymour every other weekend and half the holidays.
Ms James applied twice to vary the 2014 financial remedies order. The first variation application was concluded in 2015 by consent on the basis that the payment of spousal maintenance would be accelerated to provide for a housing fund. However, the tapering of the spousal maintenance would occur in 2020 rather than 2024, meaning that the annual global maintenance would be reduced to £60,000 per annum from February 2020 rather than 2024.
In January 2021 Ms James applied again to capitalise spousal maintenance and to increase the level of child maintenance. The FDR took place in September of that year, by which time Ms James was (without having disclosed the fact) cohabiting with a new partner. Despite the cohabitation she maintained the position that spousal maintenance should be capitalised. She went on to get married to her partner shortly before the final hearing in Summer of 2022, disclosing the marriage only 2 weeks before the hearing and for a lengthy period maintained her position for capitalised spousal maintenance.
What is plain is that HHJ Vincent and indeed Mr Justice Mostyn have taken a dim view of Ms James’ conduct generally, and specifically of her open position notwithstanding her new relationship.
The new formula
One strand of Ms James’ appeal was that HHJ Vincent had erred in not applying “the Mostyn formula”; a body of case law developed from 2003 which, in a nutshell, provided that the CMS formula should be applied for the calculation of child maintenance for incomes above the gross threshold of £156,000 up to incomes of £650,000 though only as a starting point.
You might imagine that Ms James felt she stood a good chance on this one, being before Mr Justice Mostyn. However, it was not to be. The authors are grateful to others who have set out Mr Justice Mostyn’s reasoning more fully. The key takeaway for the purposes of this article is that Mostyn has arrived at a new formula which he terms an “Adjusted Formula Methodology” (AFM) to give the “Child Support Starting Point” (CSSP).
He appears to have reverse engineered his own experience of the sorts of awards which a court might be expected to make, in order to arrive at an appropriate discount to what would otherwise be an application of the CMS formula. The discount is 2.4% for a single child, or 3% per child for each of two or three children.
In addition to the standard CMS deductions, he proposes that the payment of private school fees should be grossed up (by dividing by 0.55) and taken away from the payer’s income before applying the new discounted rates. He sets out the relevant algebraic approach at paragraph 3 of the judgment’s appendix which merits a careful review. It is noteworthy that he does not provide explicitly for the grossing up of childcare costs though the authors would suggest that this may be a very sensible basis to depart from a strict application of the formula. In any event, careful attention should be paid to the naming of the award itself – the CSSP is only a ‘starting point’ - it does not do away with the court’s obligation to apply the relevant statutory factors in arriving at a fair outcome with a firm eye on a party’s budget. Indeed, Mostyn himself ultimately declined Ms James’ appeal on this point.
Costs
Another of three strands of appeal, was that HHJ Vincent’s cost order made against Ms James was wrong. Ms James had been ordered to pay 50% of Mr Seymour’s costs. Again, Mr Justice Mostyn gave this short shrift, suggesting that the award could in fact be said to be merciful.
At paragraph 58 of the judgment, he sets out four relevant principles applied by HHJ Vincent. In summary:
i. A failure to negotiate openly amounts to serious misconduct in respect of which a court will consider making an order for costs;
ii. A failure to properly explain your claim or comply with procedural directions designed to clarify the financial landscape is tantamount to a failure to negotiate openly;
iii. Making a ludicrous claim or taking an unsustainable position which has the effect of stymying negotiations is tantamount to a refusal to negotiate openly;
iv. Where a party actually (or is deemed to have) refused to negotiate openly then “it will be fair and proportionate to ask a party to pay all or some of the other party’s costs provided that [they have the means to pay]”.
Mr Justice Mostyn goes on to endorse the four principles in the strongest terms, stating:
I fully agree with these principles and endorse them as strongly as I can. In my opinion they should become widely known. In my opinion they should be printed out and handed to all financial remedy litigants at the very beginning of every case.
The authors note that the inclusion of the affordability cross check may mean that this does not greatly assist applicants in “smaller” needs cases though we are certainly encouraged by the apparent shift in the court’s attitude to costs on a broader level.
Conclusion
There is a great deal more to unpick and we are certain that the courts will continue to tease out the inevitable tension between a formula-based approach and a reluctance to straitjacket the discretion of parties and the courts. For the time being though, parties stand to benefit from a formula which many see as a more realistic approach to child maintenance when the CMS do not have jurisdiction. Perhaps what will assist practitioners the most following James v Seymour are the tables included as part of the judgment’s appendix, which helpfully set out the calculations for a variety of factors to be considered when determining child maintenance. Whilst the tables are necessarily limited, it would seem a wise choice indeed to cross-check any client’s budget with Mostyn’s figures.