WHEN THE FINANCIAL TAP IS TURNED OFF

posted: 17th June 2016

In most relationships there is a financially stronger and weaker party. When divorce proceedings are commenced unfortunately the more affluent individual may decide to cut their spouse off and refuse to continue to financially support them. The consequence of which may lead the financially weaker party to question how they can provide for themselves or any children they are responsible for. In addition that party will then be unable to pay any solicitors fees which in turn prevents them from achieving a fair and final financial order. Turning the financial tap off on vulnerable individuals used to leave people helpless. However due to an amendment in the law, proactive solicitors can now apply for a legal services order. This application, if successful, will oblige the financially stronger party to pay their spouses legal fees. These orders are difficult to achieve however with the correct evidence, vulnerable individuals are no longer prejudiced for not being the breadwinner. So how can these orders be achieved and what needs to be evidenced?

On 1st April 2013 a new form of order was introduced. This addition to the Matrimonial Causes Act 1973 is the first since the implementation of pension sharing orders in December 2000. The insertion of sections 22ZA and 22ZB enables the Court to make an order which enforces one party to pay financial sums to the other party in order for the latter to obtain the legal services required for the purposes of the proceedings. These proceedings include a divorce, nullity, judicial separation cases and the corresponding Civil Partnership Act proceedings. This is a ground breaking piece of legislation for the financially weaker party of a divorce and although the criteria necessary can be difficult to fulfil, a successful application can make the difference in the overall financial settlement.

A successful application needs to provide evidence that the applicant has no other way in attaining funds for the purposes of legal services and as a result would not be able to obtain the appropriate legal services. Therefore the Applicant cannot reasonably be able to secure a loan and cannot put a charge over any assets recovered within the proceedings. Mr Justice Mostyn, a British High Court of Justice Judge in the Family Division, has outlined that the evidence of the same can be attained via refusals by two commercial lenders of repute and a clear statement of refusal by the Applicant’s solicitors to accept such a charge.

With countless specialist commercial loan companies providing litigation funding, supplying two rejected loan applications may be hard to prove. However Justice Mostyn asserted in Rubin –v- Rubin [2014] EWHC 611 (Fam) that the Court does not expect Applicants to commit to such financial risks in order to attain the necessary funding. For instance, the Court does not expect an individual to accept a litigation loan if the interest rate is extremely high, unless the Respondent agrees to undertake to meet the interest payments. Additionally, the Court will not expect an individual to put a charge over their property or to take out the minimal savings they have in the bank. These assertions were part of Justice Mostyn’s 14 principles of legal service orders. However he believes that a charge over a property may be reasonable if the sale of the property can be foreseen at the conclusion of the case.

Other factors for the Court to consider are dealt with in s.22ZB. These include the party’s income, earning capacity resource, needs, obligation and conduct. Rather than a lump sum, monthly instalments by the Respondent is preferred. This would then reflect the Applicant’s monthly legal invoices. Additionally, legal service orders should only provide financial protection up until the financial dispute resolution. If the dispute resolution hearing has been unsuccessful, a further legal services hearing should be listed in order to discuss the financial implications of the preparation and attendance of a final hearing.

Although still inherently difficult to attain, the assertions made by Mr Justice Mostyn in Rubin will inevitably lead to more legal service orders being made. The need for individuals to instruct solicitors in order to achieve a fair full financial settlement is clear. Weaker financial parties cannot be restricted from obtaining legal advice due to the fact they are not the breadwinner of their family home. In the same vein, financially stronger individuals cannot benefit from the fact they maintain the finances of the family. Legal service orders enable both parties to instruct the solicitors of their choice within the court arena without prejudice.

The team at PMC Family Law are a proactive department who take the initiative when the unthinkable happens. One of our clients “LD” asserts:

“PMC Family Law solicitors continued to fight for my best interests. The financial support I received throughout my marriage was cut off by my husband. I faced the trauma of potentially not being able to provide for myself let alone continue to instruct the expertise of the Family team. The department, led by Pauline McNamara, took the initiative to apply for a legal services order and as a result my ex-husband agreed to provide a lump sum. The money I received enabled me to achieve the full financial order I attained at my FDR. I cannot thank the team enough for their support. I would highly recommend Pauline and her amazing, dedicated team.”

If you are facing financial difficulties and need advice in regards to moving forward, please do not hesitate to contact the team on 0151 375 9968 who can arrange a free initial consultation.


By: Renn Moucarry - Trainee Solicitor