Funding your legal representation when separating

Although we live in an age of greater gender equality than ever before, it remains the case that when couples separate and divorce, wives are often left in a financially vulnerable position. 

This often arises because the couple have children and the wife adopts the traditional role of caring for the family, perhaps sacrificing a career, giving up work for a period of time, or working part time. 

Whilst the couple are together these arrangements work well, with the husband concentrating on providing the family with financial security and the wife looking after the children. 

When the marriage comes to an end, however, the wife may feel greatly disadvantaged, particularly when it comes to affording legal representation.

The cost of legal representation for separating or divorcing couples does not have to be eye-wateringly expensive – and of course it is a vital investment in ensuring a fair share of assets worth many times the level of legal fees -  but many wives (and of course plenty of husbands) may be unable to afford even modest legal fees. 

If one party is represented and the other not, the latter can face a significant disadvantage, not only in terms of the likely outcome, but in the daunting task of having to deal with sometimes complex negotiations and analysis without any proper legal support.

Reassuringly, there are a number of options available for people who do not have income or savings available from which to pay a lawyer.

1 Credit cards or personal loans

Many who may not have access to savings will nonetheless have access to a credit card, or can set up a new credit card account with a zero interest period.  Most firms of solicitors will accept card payments. If further funds are required over a longer period of time, it might be more economical to take out a personal loan.

2 Litigation Loan

There are a number of reputable financial institutions who will lend money to help people fund their case. Very often these lenders will make a quick decision and the solicitors can then draw down on the funds, as and when the client approves an invoice.  These loans are flexible and transparent. 

The amount available to borrow will depend upon the client’s circumstances, and the time to repay the money borrowed will often be linked to a specific event, such as the sale of a property. 

As this is a commercial arrangement, the loan will of course carry interest, paid at the end of the case when the loan is repaid.

3 Bank of Mum and Dad

In a great number of cases people will turn to their parents, or other family members, for financial support.  If a client is lucky enough to have such financial support, the benefit over a commercial loan is often the absence of any interest on funds loaned. 

The potential disadvantage might be an argument that the financial support represents a gift, rather than a loan that does need to be repaid – or at least that it is a ‘soft’ arrangement which might not need repayment for many years, if at all. 

If it is a genuine loan then it is always wise to have this recorded in a signed agreement, ideally at the outset, between the client and the family member providing the financial support.

4 Legal Services Order

If the financial circumstances of the parties are very different, it may be possible for the spouse without funds to apply to the court for an order that will require their spouse to make a payment in respect of their legal fees. 

This can be a lump sum of money or a monthly payment.  This requires an application to the court, and the judge will consider the parties’ income and other financial resources. 

The judge would also need to be satisfied that no other sources of funding, such as a loan, were available.  Such orders are particularly useful when only one spouse has a high income, or has access to considerable capital.

Stating an intention to apply for a Legal Services Order can also be useful to persuade the better-off spouse to pay both parties’ fees without having to go to court.

5 ‘Sears Tooth’ Agreement

This approach involves the client entering into a binding agreement with the solicitor so that they will be paid from the assets recovered by the client. 

These agreements are no longer popular with most firms of solicitors, as it may mean that they don’t get paid for many months or even years, or even not at all if the outcome is not what was expected, or if the couple reconcile. 

There is also a cost to the client, in that the hourly rates charged are higher to compensate the solicitor for the risk being taken.

At Goughs we can help you to decide which option is best for you, depending on your particular circumstances. 

Many clients who have the funds to do so simply pay their legal fees each month or set up a monthly standing order to help manage the costs over a period of time.  Whichever approach may be right for you, it is important to remember:

The cost of legal representation does not have to be high, but the financial cost to a party who is unrepresented may be extremely high if they do not receive a fair entitlement to the family’s collective assets and income.

For further information or to arrange your free half-hour initial consultation please contact the Family team on 01249 712193 or email family@goughs.co.uk.