Legal Services Orders: Financing Financial Remedy Proceedings
Expert and cost conscious divorce solicitors
What happens if one party has sacrificed a career to raise the family, or alternatively simply lacks the ability to meet the divorce costs or pay for legal advice on divorce when the issue of finances is addressed?
Until very recently Legal Aid was available to separating spouses who found themselves in this very position. Whilst Legal Aid is still potentially available to assist with the cost of mediation, it is no longer available to assist with solicitor's costs (subject to certain provisions).
The removal of Legal Aid has had far reaching consequences for many people who are going through a separation and need to advice on divorce and how to address the division of the family finances.
The question therefore is, how is one party to a divorce who has negligible capital able to afford a family lawyer so as to secure legal advice and representation in what can be very complicated family proceedings?
Maintenance Pending Suit
If Divorce proceedings have not been issued then it is open to the less well-off spouse to make an application to the Court for Maintenance Pending Suit. Such an application will only deal with that party's short term needs.
;When considering an application for Maintenance Pending Suit the Court will consider what is reasonable, the standard of living prior to separation and the statutory factors set out in the Section 25(2) of the Matrimonial Causes Act 1973. To be successful the party making the application will need to provide to the Court with evidence of why the Order is necessary and give up to date details of their financial circumstances. Although the responding spouse will also have to do this, the catch 22 is that this type of Order will not assist with the cost of the legal advice provided to the applying spouse.
Such an application does not also make provision for the other spouse to make a payment in respect of the other spouses ongoing divorce costs.
High Street Loans, “Soft Loans” and Litigation Loans
Litigation Loans and high street loans (i.e. loans from banks etc.) may be available to assist with the immediate provisions of the cost of legal fees. However, such loans will attract interest and monthly repayments, or repayment in full upon completion of the proceedings and may not be financially prudent. Certainly in the case of litigation loans, the loan provider will want some form of guarantee of repayment at the end of the case. Therefore, a party who needs to remain living in the family home for the foreseeable future may not be eligible. Some people may be able to ask family and friends to assist with the immediate funding of legal costs. These type of loans are sometimes called “soft loans”. However, such help may not be available for many people for a variety of reasons. </p> <p> </p>
Legal Services Orders</strong></p> <p> </p>
Recent changes to the Matrimonial Causes Act 1973 now allow one spouse to make an application to the Court for a payment from their spouse to assist with the cost of obtaining advice from a family law solicitor. However, the Court cannot make an Order unless the applying spouse can demonstrate that without such an Order they would be unable to reasonably obtain legal services.</p> <p> </p>
In demonstrating this to the Court the applying spouse will need to show that they are unable to raise loans (from either institutional lenders or family) or grant a charge (i.e. give someone an interest) over any assets or property that may be recovered during the proceedings.</p> <p> </p>
In some cases, such as personal injury proceedings for example, solicitors will delay recovering their fees until the conclusion of the case. This is not a viable option for many family law solicitors’ practices. As part of their application, those spouses making an application for an Order that their spouse pays their legal costs will have to demonstrate that their family solicitor is unable to delay payment of their fees. Usually a letter from their solicitor will suffice. </p>
If it can be established that no immediate means to meet legal costs is available and an Order is made, then that spouse can ask that any payment is made in instalments or a lump sum. In reality a lump sum payment may be the best option as this may remove the question of ensuring monthly payments are made by their spouse.</p>
When considering the application the Court will assess the applying spouses application using a checklist which includes whether they have considered all the alternatives to proceedings such as mediation. The Court will also consider if the applying spouses needs could be met by increasing their earning capacity. If this can be increased the Court may expect that party to undertake such a course of action. The Court will also assess whether granting the application will cause the other spouse, the paying partner hardship‚ or prevent them from obtaining legal services. However, this may still not prevent the Court making an Order in the applying party's favour.
