The Government has recently all but abolished Legal Aid for family law cases. There are very few exceptions to this rule, the main one being where you or somebody in your immediate family has been the victim of domestic violence by your intended opponent. You also still have to qualify financially by a means test.
Staged Payments by Arrangement with your Solicitor
In many cases, we offer our clients a flexible staged payment arrangement. Right from the start, we'll explain what the costs are going to be and once we’ve agreed our fees with you, a standing order can be set up for regular payments at a rate you can reasonably afford. Unlike bank loans or credit cards, we don't charge interest provided that the agreed schedule for payment is kept to. The agreed monthly sum is calculated to achieve payment of our fees over the estimated lifetime of the case.
If you cannot or do not want to try to get Legal Aid and need help to pay your legal fees you may qualify for a “Litigation Loan” from one of our approved providers.
We are panel solicitors for two of the main Litigation Loan companies. These are:
This company provides loans for family law proceedings in cases where the client owns a property against which the loan can be secured by a Legal Charge. For instance, if you have a house which you jointly own with your spouse but you are on a low income, you can ask Novitas for a loan to cover the costs of your case. They will register a Charge against the property for the amount of the loan. They charge interest on the loan at 18% per annum. The loan is not repayable until the end of the case. They will carry out a credit reference check before granting a loan and may refuse the loan if the check is not satisfactory.
These loans are best suited to a client who fully expects that at the end of their case the matrimonial home will be sold and they will be receiving sufficient funds from the proceeds of sale to discharge the loan.
More information about Novitas is available on their website - http://www.novitasloans.co.uk/novitas.html
Iceberg Client Credit
Iceberg do not require a Legal Charge over property and therefore their loan facilities are likely to be better suited to a client who for example does not own or co-own any property with their spouse but where they are confident that at the end of the case they will receive a Lump Sum Order or a Property Adjustment Order that will provide them with sufficient funds to pay off the loan. Iceberg also charge 18% interest per annum.
As your case progresses and your solicitor bills you for work done either by the firm or by other people employed on the case such as barristers, Iceberg will pay your solicitor directly and will charge the client interest which has to be paid monthly. For example if your loan is for £1,000.00 then there is an interest charge of £15.00 per month. The balance of the account is then repaid at the end of the case.
More information about Iceberg Client Credit is available on their website - https://www.clientcredit.co.uk/information-for-clients
Personal Bank Loans
You need not of course borrow from either of the above providers. You can make your own arrangements direct with your bank for a personal loan to fund the costs of your family law case. Different banks will operate in slightly different ways but all with a common theme. They will usually expect an Undertaking to be given by your solicitor to repay the amount of the loan at the end of the case. This means in effect that you again need to have a very high expectation that you are going to recover sufficient capital in the course of the proceedings to be able to repay the loan.
Re-mortgage of an Existing Property
This is a possibility if you own property in your own name and your existing Lender is happy to extend the amount of your mortgage, if you already have one. If you make such an arrangement then you can provide funds directly to your solicitor. This type of funding might suit someone who is not necessarily expecting to obtain a capital settlement at the end of their case but is for example dealing with a dispute concerning arrangements for children.
Loans from Family & Friends
You may be fortunate enough to have a family member or a close friend who is prepared to offer you funding to finance your case. Sometimes they may be prepared to do so without charging you any interest and also on very relaxed terms. If this sort of loan is available to you the only thing that you need to be sure of is that you and the intended Lender both have a full and proper understanding of the terms on which the loan is being made. It is always best that these terms should be written down and agreed by both of you to avoid any argument at the end of your case, and if you are in any doubt about this sort of funding you should speak to your solicitor about it in advance.
Financial Services Orders
These are a relatively new creation by Parliament. They can be used by somebody involved in a family law case who cannot afford to pay their own legal fees but whose opponent does have sufficient means, whether in the form of income or capital, to provide them with the necessary funding.
The procedure for obtaining a Legal Services Order is in itself fairly complicated but it may, for some, be their only option. In practice it will only suit a client who cannot obtain funding for their case through any other means, for instance when no loan is available and the client does not have sufficient income or capital of their own to pay their legal costs.
An application to the Court has to be made and as a general rule the client will have to satisfy the Court that they have used their best endeavours, through negotiations or mediation, to avoid having to go to Court to resolve their dispute.
In each case the Court will only grant a Legal Services Order if it thinks that your opponent is in a position to reasonably afford to make the payments. In most cases, at the end of the proceedings, any award of capital or maintenance that is made to you may be reduced in order to take account of the amount of money that your opponent has provided to you under the Legal Services Order, so it is not necessarily going to be “free money”.
We can discuss all your options with you at the start to make sure that the funding arrangement you have is the one best suited to your needs.