The general approach in most family cases is that each person pays their own legal fees, and the final sums are accounted for as a reduction in the overall assets available to the parties.

Here we outline some of the options which might be available to you to fund your legal fees.

Own resources 

You may have your own income or savings to pay your legal fees as and when they are billed.

Family or friends

Some clients have private arrangements with family or friends to help fund their legal fees until the financial issues are resolved and capital can be released.  This type of arrangement can help because it provides a flexible resource, usually without high rates of interest.  However, the way that the loan is set up will be important and ‘family loans’ can be susceptible to an argument by the other party that the sums loaned should be left out of the calculation of the overall value of the couple’s assets.  Care should be taken to evidence the terms of the loan and the court will look at the reality of whether repayment will be enforced.

Commercial loan 

Lawyers like FLiP are not licenced to give advice on the commercial funding options available to you. But general information is available online for example here and we would encourage all our clients to take advice from an IFA or financial planner.

Specialised providers 

There are a number of finance houses which specialise in providing loans to fund litigation or family law cases.  The lending decision is based on the circumstances of each individual case and as part of the application process, the solicitor is asked to provide some key information including the likely value of the financial settlement and the loan amount needed to reach the conclusion of the case.  As a result of this, the terms of any loan will be specific to each client and we would encourage clients to instruct an IFA to undertake a thorough review of the market and wherever possible, a comparison of the terms.  It will be important, amongst other things, to consider whether the terms of the loan agreement allow funds to be drawn down in tranches and when interest and repayment become due.  Many lenders will provide an illustration of cost which can be helpful when making an informed choice.  As well as input from an IFA we would also encourage all clients to have independent legal advice on the terms of any loan.  This is usually a requirement of the litigation loan funder in any case.

If required, your lawyer at FLiP can provide the names of firms who specialise in providing loans to fund litigation or family law cases whom we have dealt with before.

Litigation loans are not usually a viable option where the issue is parenting proceedings, pre-nuptial agreements or where you are making claims for children only or only to vary maintenance.

Other side pays voluntarily 

If you don’t have the money to cover your legal fees but your former partner does, they might agree to pay your legal fees for you. This is particularly the case where otherwise you might have to take out a commercial loan at a high interest rate to fund your fees with the result that the loan reduces the resources available for division. However, it is unusual for a former partner to give an open-ended commitment to fund legal fees and care is needed to avoid advancing to a critical stage in the case, only to find that your former partner has stopped paying your bills leaving you stranded. You will probably want to have a back-up arrangement too.

Interim financial provision

Where you don’t have access to funds and all the assets are in your former partner’s name it is possible for the court to order them to pay the legal fees.  The court will need evidence of the overall financial circumstances and will look to see that the case has been run in a reasonable way.  A legal services payment order (LSPO as they are known) is a last resort and the court will want evidence that funding cannot be secured elsewhere (including evidence of approaches to commercial and specialised lenders).  The legal fees associated with making an application for a LSPO can be significant and it should be noted that not only will the order not usually be back dated it will also usually be time limited, to the financial dispute resolution appointment.

On the other hand, obtaining interim financial provision can be a reminder to all parties of the overall impact of costs and it can encourage settlement discussions.