Wed 25 Mar 2015

How to pay for your divorce

The case of Wyatt v Vince highlights another difference between Scots and English law - the important question of how to pay for your divorce.  In Wyatt v Vince, the Court ordered Mr Vince to pay the eye-watering sum of £125,000 to fund his ex-wife's legal battle.  What other funding options would have been available to Ms Wyatt, under either the Scottish or English legal system?  And which system is fairer?

Litigation loans

In both England and Scotland, if you are a spouse who does not have funds available to pay for the divorce process, but you are likely to be awarded a significant sum or receive valuable assets once the matter of financial provision has been resolved, you might consider taking out a loan. There are companies in Scotland who provide lending for the specific purpose of funding legal fees for divorce.  A number of our clients have taken this route.  If this is an option you would wish to investigate further, please let us know. 

Legal aid

In Scotland, civil legal aid is still available for divorce and other family law matters if you meet certain criteria, and provided the firm takes on legal aid cases. If your savings and anything of value that you own (not including the home you live in) are worth less than a set amount, you receive certain benefits and your weekly disposable income is less than a set amount, it is likely that you will qualify for legal aid for the purposes of civil court proceedings. The Scottish Legal Aid Board has to assess that you are financially eligible for legal aid; that you have a legal basis for your case; that it is a reasonable use of public funds and that help is not available from elsewhere (such as from an insurance company or professional body). Depending upon your disposal income and capital (and your partner's, if applicable), you may require to pay a contribution towards the grant of legal aid. It is important to remember that legal aid is essentially a loan - any funds you are awarded by the Court or that you receive in settlement of the case will be subject to claw back from the Board. 

In England and Wales, the Legal Aid budget has been slashed.  Legal Aid in family cases is now only available in very restricted circumstances, such as where domestic abuse has been documented by the police.  One stated purpose of the reforms is to take conflicts out of court and encourage mediation.  This aim has proven remarkably short-sighted.  Mediation numbers have fallen sharply in England and Wales since the reforms, as it was of course family law solicitors who referred couples to mediation and other non-litigious dispute resolution methods.  If a spouse cannot access a solicitor to get advice about mediation, he or she will not go - and what about access to justice for the spouse or parent whose ex-partner simply refuses to cooperate with negotiation or mediation? 

Legal services order

Ms Wyatt couldn’t afford to pay her solicitor. There was no legal aid available for her in England, and she did not qualify for a litigation loan. So instead she asked Mr Vince to pay her ongoing legal costs. The court made what was then known as a 'costs allowance order' - new rules have since replaced this with a 'legal services order'.  This is an order obliging the other party to the marriage to pay an amount to enable the applicant to obtain legal services.  The court can only do so if satisfied that the applicant would otherwise be unable to obtain appropriate representation, such as via a loan.  The Court should take into account the parties' circumstances, conduct of the case, and whether the order would cause the paying party "undue hardship".  In Wyatt v Vince, where the Court was very critical of the level of Ms Wyatt's financial claims, can it really be just for Mr Vince to have to fund her lawyers?  This type of order is simply not available under Scots law - another reason for Mr Vince to perhaps wish he had moved north of the border. 

Award of expenses

In Scotland, although there are no legal services orders, it is possible to make arguments about who should pay for the expenses of the action at the conclusion of the case, if you have "won".  One difficulty is that in family cases, it is not always straightforward to assess who has won, and the Court can sometimes be reluctant to make an award.  However, the prospect of being found liable in expenses does impact upon parties' positions, particularly in a financial case, with pre-hearing offers carefully considered bearing this in mind.  If an award of expenses is made against the other party, you should not expect to be reimbursed for every pound spent on your solicitor's fees. The award might cover about half to two thirds of what you have been billed by your solicitor.

Under English law, the rule (other than in exceptional circumstances) is that there is no award of expenses at the end of a case dealing with financial matters on divorce (although expenses can be awarded in disputes about jurisdiction or spousal maintenance).  The Scottish position seems considerably fairer in this respect.

At Morton Fraser, we always aim for our costs to be clear.  If you have any queries about divorce funding, or the issues in this blog, please just contact our expert Family law team. 


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