Money for legal costs 1
What do you do if you if your spouse has got all the money and you haven’t got anything to pay lawyers with?
The answer may be to make an application to the court for a legal services payment order. The courts have been dealing with applications like this for a long time now. The rules are set out in the Matrimonial Causes Act 1973, in sections 22(ZA) and 22(ZB). I’m going to set those sections out here for your reference, but they are quite long so don’t read through now, I’m going to explain it below.
[22ZA Orders for payment in respect of legal services
(1) In proceedings for divorce, nullity of marriage or judicial separation, the court may make an order or orders requiring one party to the marriage to pay to the other (“the applicant”) an amount for the purpose of enabling the applicant to obtain legal services for the purposes of the proceedings.
(2) The court may also make such an order or orders in proceedings under this Part for financial relief in connection with proceedings for divorce, nullity of marriage or judicial separation.
(3) The court must not make an order under this section unless it is satisfied that, without the amount, the applicant would not reasonably be able to obtain appropriate legal services for the purposes of the proceedings or any part of the proceedings.
(4) For the purposes of subsection (3), the court must be satisfied, in particular, that –
(a)the applicant is not reasonably able to secure a loan to pay for the services, and
(b)the applicant is unlikely to be able to obtain the services by granting a charge over any assets recovered in the proceedings.
(5) An order under this section may be made for the purpose of enabling the applicant to obtain legal services of a specified description, including legal services provided in a specified period or for the purposes of a specified part of the proceedings.
(6) An order under this section may –
(a)provide for the payment of all or part of the amount by instalments of specified amounts, and
(b)require the instalments to be secured to the satisfaction of the court.
(7) An order under this section may direct that payment of all or part of the amount is to be deferred.
(8) The court may at any time in the proceedings vary an order made under this section if it considers that there has been a material change of circumstances since the order was made.
(9) For the purposes of the assessment of costs in the proceedings, the applicant's costs are to be treated as reduced by any amount paid to the applicant pursuant to an order under this section for the purposes of those proceedings.
(10) In this section “legal services”, in relation to proceedings, means the following types of services –
(a)providing advice as to how the law applies in the particular circumstances,
(b)providing advice and assistance in relation to the proceedings,
(c)providing other advice and assistance in relation to the settlement or other resolution of the dispute that is the subject of the proceedings, and
(d)providing advice and assistance in relation to the enforcement of decisions in the proceedings or as part of the settlement or resolution of the dispute,
and they include, in particular, advice and assistance in the form of representation and any form of dispute resolution, including mediation.
(11) In subsections (5) and (6) “specified” means specified in the order concerned.] 9
[22ZB Matters to which court is to have regard in deciding how to exercise power under section 22ZA
(1) When considering whether to make or vary an order under section 22ZA, the court must have regard to –
(a)the income, earning capacity, property and other financial resources which each of the applicant and the paying party has or is likely to have in the foreseeable future,
(b)the financial needs, obligations and responsibilities which each of the applicant and the paying party has or is likely to have in the foreseeable future,
(c)the subject matter of the proceedings, including the matters in issue in them,
(d)whether the paying party is legally represented in the proceedings,
(e)any steps taken by the applicant to avoid all or part of the proceedings, whether by proposing or considering mediation or otherwise,
(f)the applicant's conduct in relation to the proceedings,
(g)any amount owed by the applicant to the paying party in respect of costs in the proceedings or other proceedings to which both the applicant and the paying party are or were party, and
(h)the effect of the order or variation on the paying party.
(2) In subsection (1)(a) “earning capacity”, in relation to the applicant or the paying party, includes any increase in earning capacity which, in the opinion of the court, it would be reasonable to expect the applicant or the paying party to take steps to acquire.
(3) For the purposes of subsection (1)(h), the court must have regard, in particular, to whether the making or variation of the order is likely to –
(a)cause undue hardship to the paying party, or
(b)prevent the paying party from obtaining legal services for the purposes of the proceedings.
The first point is that you have to have proceedings for divorce.
You can ask the court to make one of these orders for the purpose of enabling you to get legal services for the proceedings. This can cover advice from a lawyer, having a lawyer represent you at court or even someone to represent you at mediation.
You might be asking for e.g. £15,000 to enable you to be represented in financial remedies proceedings.
The key test is that the court must not make the order:
“…unless it is satisfied that, without the amount, [you] would not reasonably be able to obtain appropriate legal services for the purposes of the proceedings or any part of the proceedings.”
You need to convince the court that you can’t reasonably afford to fund the proceedings yourself.
In particular you need to satisfy the court that you can’t obtain a litigation loan to fund the proceedings. There are a number of litigation loan companies out there. You should approach them to see if they will fund you. If they won’t, get it confirmed in writing.
You also need to be able to show you can’t get a loan from a bank. You need to get letters from 2 banks to show they wouldn’t give you a loan. Of course the banks may be prepared to loan the money but you may be able to show the court that you would not be able to afford the repayments.
The reasonableness of you taking out a loan would be judged against the position of your spouse. If your spouse has £100,000 of savings which is in reality property built up during the marriage, it will make it less reasonable for you to have to take out a loan.
You also need to be able to satisfy the court that you are unlikely to be able to secure legal services by “granting a charge” over any property recovered. This is referring to something called a “Sears-Tooth” charge. Some solicitors will agree to take a case on if you give them a right to take their fees from any money you get back in the divorce. Solicitors seem to be less willing to do this these days however. If you have a solicitor you need to provide a letter from them setting out that they won’t enter into this sort of arrangement. If you don’t have a solicitor, in your statement you should set out what efforts you have made to find a solicitor who would enter into this sort of arrangement.