Multimillion-dollar divorce legal fees

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A legal standards committee has been ordered to take another look at a complaint about excessive legal fees charged for a multimillion-dollar divorce settlement.

A man named only as Mr AA complained to the Law Society in March 2011 after being charged more than $475,000 in fees for handling his divorce and property settlement with his ex-wife of his $28 million in assets.

While a North Island Standards Committee initially found the fees were not excessive, on July 25 this year, a review officer decided the case should be looked at again.

Mr and Mrs AA married in 1989.

Mr AA had built up significant business and personal assets which were described by the Court as being "held in a complex web of interrelated companies and trusts in New Zealand and the United States" and having a value around $28 million.

Divorce proceedings began in August 2007 and Mrs AA made a claim for half of all assets held through the various trusts and companies.

Mr AA hired Law Firm A, which had previously represented him in commercial matters, but terminated their services in December 2010 before any court hearing had taken place.

During that time, Law Firm A had issued 25 bills totalling $476,828.81. Of that, $208,164.80 has been paid.

In his complaint against two partners and a solicitor at the law firm, Mr AA said the lawyers had told his wife's solicitors they would hold the net proceeds of the sale of an Auckland apartment building - without Mr AA's instructions.

He said the law firm had charged fees which were more than fair and reasonable, and had failed to release files he requested.

Mr AA thought his legal fees were excessive as his ex-wife's were half the cost of his at $220,295.07 as at February 25, 2011.

While the Standards Committee decided the fees were fair and reasonable, a case reviewer last month suggested an independent costs assessor should investigate.

"The fees charged by Law Firm A are considerable, and it is difficult to escape the comparison with the fees charged by the lawyers for Mrs AA," said review officer Mr Vaughan.

He said there were "sufficient areas of concern" to dictate a second look at Mr AA's complaints, and directed it back to the Standards Committee.