After the withdrawal of public funding for most family matters, some parties may find it difficult to pay the legal fees involved in court proceedings. A Payment for Legal Services Order (LSPO) can be used to order one party to make a payment to the other to fund their legal representation.
LSPOs can be established under Sections 22ZA and 22ZB of the Marriage Causes Act 1973. The power to make such an order was introduced in April 2013. They can be used to cover the costs of obtaining legal advice, representation and any other form of dispute resolution, such as mediation. However, it is unlikely that it would be proportionate to make such a request if the parties are only attending mediation and there are no court hearings.
When can you use an LSPO?
These orders can be made in the following proceedings:
- Financial recourse procedure
- Judicial separation
Similar arrangements have been made in proceedings relating to children, whether in disputes over arrangements for children or in claims for financial claims on behalf of children of unmarried couples. However, the power to seek costs in children’s cases is found in case law rather than in law.
More particularly in the recent case of Re Z (Annex 1: Order for the financing of legal costs; Provisional financial provision) the mother initiated proceedings and applied for an order for the financing of legal costs in connection with Schedule 1 and Article 8 of the Children’s Act 1989 concerning a life order proceeding which she had requested in respect of his daughter as well as a financial provision. The mother was asking for payment of both the historical costs which she was unable to pay and the future costs of the litigation. Costs were awarded to the mother for her historical and current legal costs to enable her to continue to have access to appropriate legal representation.
What types of payments can be made?
The payment does not have to be a large one-time payment. The paying party may be ordered to pay in installments or to make payments for a specific period, for example up to a particular stage of the proceedings. Funding for legal services may also be used to recover historical unpaid legal fees if the court is satisfied that without paying those fees you would not be reasonably able to obtain appropriate legal services in the future. However, we would like to caution against this approach and secure the LSPO before you owe your attorneys’ fees, as the court has the discretion to decide whether or not to grant historic payments.
What steps do I need to take before I can apply for LSPO?
You can apply for an LSPO if you can convince the court that you have no other way to finance legal services. You will need to show that:
- You don’t have enough funds but your partner does
- You cannot get a loan to pay for the services. This could include a specific litigation loan, as well as a loan from a bank or a credit card loan. A letter from a disputing bank or lender would prove it.
- Your legal advisor is unwilling to enter into a Sears Tooth agreement (which allocates part of your settlement to your lawyer to cover his costs at the end of a case). You will need written proof from a partner in the law firm to show that they are unwilling to enter into this agreement with you.
- You are not entitled to legal aid. Most cases will no longer be eligible for legal aid following the 2013 reforms, so this is unlikely to be applicable.
What factors does a court take into account?
When deciding to make an order, the Court will take into account the following factors:
- The income, earning capacity, property and other financial resources of you and your partner both now and what you are likely to have for the foreseeable future;
- The financial needs, obligations and responsibilities of each of you, now and for the foreseeable future;
- Procedures and issues in dispute;
- If the paying party is legally represented;
- All measures taken to avoid procedures, such as participation in mediation;
- Your conduct; and
- The effect of the order on the paying party and whether this will cause undue hardship or prevent it from obtaining its own legal representation.
In summary, the Court must be satisfied that:
- Without the order, you would not be reasonably able to obtain appropriate legal services;
- You are not able to get a loan to pay for the services, for example by credit card; and
- You are not able to raise funds through other means such as securing debt on your property.
Contact our family law experts
The BWI family team can provide you with expert advice on all aspects of family law. Yasmin Kibble is a lawyer on the team and can be reached on 01895 207 834 or [email protected]