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The Modern Way to Fund Your Divorce

The days of the financially weaker party receiving state assistance (Legal Aid) are long gone save for exceptional circumstances.

In cases where a family has transparent English based assets or income there are solutions:-

1.Cases where there are a lot of family capital but income is tight

Following the demise of Legal Aid some specialist lawyers would permit the claiming party to pay at the end of the case; that arrangement is rarely used.

Where there is sufficient capital it may be possible for either or both parties (rare) to apply for a loan from businesses which specialise in this area who will lend to meet legal costs (financial claims and occasionally children issues) and potentially living expenses until the conclusion of the case.

Clearly each case is dealt with individually and on its own merits. The common features to all are charges, interest and an obligation to pay from the financial settlement.

2.In cases where one party to the marriage has income and or capital and the other does not

Sensible spouses will agree through lawyers that the financially stronger party will not only meet the interim income needs of the financially weaker party but also his or her legal fees (subject to certain limitations to avoid abuse). This sort of set up not only provides for equality of “bargaining power” but more importantly should garner good will, an increased chance of settlement, and as such, significantly less legal fees for both parties.

There is no doubt that negotiated settlements lead to better harmony between the parties and the children post the breakdown of the relationship.

Should it be impossible to work out an agreed solution to fund interim arrangements then the financially weaker party has one of two options:-

  1. An application could be made to litigation funders (as explained above);there would be interest and costs which the party with the assets/income is at risk of paying for (in itself a great encouragement to cooperate).
  2. The most draconian step a party can take to secure interim financial support and legal fees is an application to the Court.

In common with all litigation it is risky and expensive; if a party is forced by the conduct of the other to proceed along this route then the chances of a settlement are reduced, and further costs, acrimony and litigation will be created.

In order for an application to be successful the applicant needs not only to demonstrate a need but moreover that funding is not available and that the paying party has the resources to meet the claim for interim provision (to include legal fees).

As well the cost of an application for legal fees there is the risk (of one of the few exceptions in matrimonial cases) of a Costs Order being made between the parties in certain circumstances. The risk of such an Order encourages the settlement of this discrete point.

Two lessons need to be taught to those with such difficulties:-

  1. If a consensual solution can be reached – go with it, as it should form the “bedrock” of civilised separation; or
  2. Absence of a solution those in need can seek assistance in the form of funding or an application to the Court.

 

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