Lessons from Thiry: The important distinction between financial and litigation misconduct

Property tycoon Didier Thiry has been ordered to pay his ex-wife Alisa Thiry £17 million in a judgement issued by Sir Peter Singer. Due to Mr Thiry’s ill behaviour, which included him acting in a ‘financially predatory fashion’, as well as bombarding his ex-wife with communications throughout the proceedings, the judgement is riddled with references to Thiry’s misconduct. Indeed, Sir Singer described Mr Thiry as an ‘unprincipled rogue’ who had shown a ‘sadistic side to his personality’.

The strong descriptions used in the judgement have led to some people inaccurately suggesting that Mr Thiry’s misconduct during the legal proceedings, which also includes failure to disclose his finances, has had a direct impact on the size of the financial sum awarded by Sir Singer. This is, in fact, incorrect; and, in order to fully understand the outcome, a distinction must be made between this (Thiry’s litigation misconduct) and his financial misconduct throughout the time of their marriage.

When dealing with financial settlements upon divorce, the court may take into account certain factors. Financial conduct is one such factor that may be considered under S25(2)(g) MCA 1973 if it would be inequitable to disregard it. Mr Thiry’s financial misconduct included him preying on his ex-wife for his profit and to her detriment after she had trusted his advice on his reassurance that he was an ‘experienced investor and financial expert’. As explained by Burton J in S v S (non-matrimonial property: conduct)* , only conduct that causes a ‘gasp’ should be considered – as opposed to that which only produces a ‘gulp’. Sir Singer clearly felt that this behaviour had the ‘gasp factor’ and his award reflects this accordingly.

Litigation misconduct, on the other hand, only covers behaviour that takes place during the proceedings. In the case of Mr Thiry, this included his financial non-disclosure and offensive statements made to his ex-wife and her lawyers. It is highly relevant that this behaviour took place once the Thirys’ marriage had broken down. As suggested by Thorpe LJ in Tavoulareas v Tavoulareas** , a clear distinction between marital conduct and litigation conduct is imperative, due to the fact that S25(2)(g) should only catch marital misconduct.

Sir Singer honoured the above distinction in his judgement by not attaching a punitive element to Thiry’s litigation behaviour when dealing with the capital award. Although Mr Thiry’s conduct during litigation was unacceptable, his punishment for such behaviour did not come in the form of a generous financial award to Mrs Thiry. His financial conduct throughout the marriage, on the other hand, will have been considered as Sir Singer attempted to restore Mrs Thiry back to the position she had been in when they married.

Mr Thiry’s litigation behaviour, however, is penalised by way of a costs order to his detriment, as Sir Singer instructed him to pay Mrs Thiry’s entire £456,000 legal bill. This indicative move serves as a warning that, while a party’s bad behaviour during proceedings cannot affect the terms of an order, one should not assume that it will go unpunished. Although a costs penalty for litigation misconduct is discretionary, the fact that a judge is willing to order a disruptive party to pay the other side’s half a million pound legal bill in its entirety should serve as a significant deterrent against acting in such a manner.

Katie McCann: Kuits Family Law

Katie McCann: Kuits Family Law

Head of the Family Law Department and In-House Counsel at Kuits Solicitors
Katie McCann is Head of the Family Law Department at Kuits Solicitors based in Manchester. Katie specialises in all aspects of family law. She has a special interest in resolving high value relationship breakdown disputes.
Katie McCann: Kuits Family Law
Katie McCann: Kuits Family Law

Published by

Katie McCann: Kuits Family Law

Katie McCann is Head of the Family Law Department at Kuits Solicitors based in Manchester. Katie specialises in all aspects of family law. She has a special interest in resolving high value relationship breakdown disputes.