By Wayne Lynn, Partner
There is no area of law that stirs such emotions, or goes to the very heart of our lives, as family law. Whether that is dealing with financial settlement upon divorce or separation, resolving children’s living arrangements or negotiating the terms of a prenuptial agreement.
There can be no substitute for advice from a specialist family lawyer, to negotiate the legal minefield, and ensure the best possible outcome.
However, in most cases, the need for legal advice can be both unexpected and unplanned, and can also arise at a time when budgets are stretched – particularly around the time of separation.
As part of the initial meeting, your lawyer should be able to identify the issues arising together with the steps which will be required. He or she should also provide an estimate of charges for the initial work, together with a best estimate of the costs which may be incurred in taking your case to its conclusion.
In certain cases, such as “one off” advice or a straightforward divorce, your lawyer may be able to undertake the work for a fixed fee. However, given the sheer unpredictability of family law cases, it is often impossible to estimate the likely overall costs with any degree of accuracy. Therefore family lawyers usually calculate their fees by reference to an hourly rate.
Affordability is crucial and your lawyer should also discuss with you the merits of your case. This means an honest conversation about whether the legal costs which could be incurred may prove to be disproportionate, for example where the value of the assets is low, or where you and your ex are very close in terms of agreeing what you are seeking in a settlement.
Funding legal fees can be a daunting prospect for many people, particularly where cashflow is tight, or there is insufficient liquid capital to fund legal fees on an ongoing basis. However, there are a number of options available:-
- A regular monthly payment on account of costs can be agreed, which is then used to pay or offset invoices as they are generated. This spreads payments over the course of the case, with the intention that legal fees are discharged in full by the conclusion.
- This option can take various forms. Any decision to fund legal fees on credit is one which must be taken independently by any client. The credit option is not uncommon in divorce proceedings, and is shown as a “need” – to be taken into account by the court, or in negotiations – when dividing the assets. Options include the following:-
- A loan from friends or family. Often referred to as a “soft loan”, or the “bank of mum and dad”, the terms of the loan must be made clear. There should be a written record of the agreement if possible, so as to ensure that it is taken fully into account either by the court, or as part of the negotiation.
- A commercial loan, from a regulated lender. This may be for example a personal loan or credit card. These carry interest. Both interest and capital need to be repaid on an ongoing basis and will have to be borne in mind when budgeting for monthly expenditure.
- There are specialist lenders who are prepared to take security over assets such as expensive motor vehicles, paintings or jewellery in return for advancing monies.
- Litigation loans. There are a number of bespoke lenders and banks who are prepared to lend to clients for the specific purpose of enabling them to pay their legal fees. The lender will usually require details of the assets, their value, and the likely share of those assets which the client will receive by way of settlement. Usually the capital element of the loan (together with accrued interest) will be deferred until the conclusion of the case, and the capital is received under the terms of the settlement. The advantage of litigation loans is that usually interest will only be payable on the capital sums drawn down to pay your legal fees. This is not a viable option where, for example, the only issue in dispute is the children’s living arrangements.
- If, within divorce proceedings, your ex-spouse has the financial means to fund your legal fees personally, yet refuses to do so, and it is not possible to obtain a loan to fund your fees (evidence is required from at least two commercial lenders), it is possible to apply for an Order requiring the other spouse to make a contribution towards your legal fees. This is known as a Legal Services Payment Order.
The team at Silk Family Law are specialist family lawyers, and we are the only family law firm in the north of England with the benefit of an in-house barrister Ian Kennerley. Members of our team range in experience from our barrister and senior solicitors, to junior solicitors, legal executives and legal assistants. The hourly rate of each lawyer reflects their seniority and experience. We ensure that all work undertaken is by the most appropriate lawyer. This ensures that clients are charged a “blended rate” which helps to keep fees as low as possible whilst ensuring that clients are provided with the highest levels of service and advice.
We are happy to discuss our fees and how we work with clients and potential clients. If you have any queries about funding legal fees for a divorce, or have any other questions about separation and divorce you can email me direct at email@example.com
Follow me on Twitter at @waynelynn and Silk on @silkfamilylaw