Paying for your Advice

The general principle is that each party pay their own legal costs.
There are various options available:-

Family and Friends - Soft loans
When borrowing money from friends and family to assist with legal fees, it is advisable to have a loan agreement drawn up ( prepared by solicitors and signed by both parties), confirming the repayment terms of the loan. This could be considered to be a "soft loan" or a "gift" as opposed to a commercial debt when the court are considering liabilities when dealing with the division of the parties assets.

Using saving and investments
If you have savings, ISAs or other similar investments, which are not earning much interest, these could be utilised to fund your legal advice. Advice should be taken regarding which investment to cash in to ensure tax liabilities are minimised. If the savings or investments are in joint names you may be able to reach an agreement that certain funds are set aside to pay for each party's legal fees. The Courts will consider this liability when considering the division of assets.

Litigation funding
Some banks and other organisations offer tailor made loans to fund the costs of family proceedings, the rates of interest maybe high, or security required. It is worth seeking advice from an Independent Financial Advisor before entering into such an agreement.

Remortgage of property
This is only available if there is sufficient equity in the property and is not appropriate when the property is in joint names and the other party does not consent. Additional security must be provided due to the risk of the loan not being repaid. However the loan can last beyond the duration of the proceedings.

Sears Tooth Agreement
Under this Agreement you enter into a deed assigning your financial settlement to your solicitor, who takes out their costs, before you receive your capital. This is not freely available as it is very risky for solicitors to recover their fees. It is not appropriate with maintenance claims. You must take independent legal advice before entering into such an agreement.

Bank Loan / Credit Card
It is possible to obtain a loan from a Bank, however they will require a legally binding promise from the Solicitors and from you that their debt with be repaid. The Solicitor's bill will be paid regularly by the bank with your authority and interest shall be applied to the borrowed sum. Credit cards can be used, however if the balance is not cleared on monthly basis, then this can be expensive and therefore is not advisable to fund matrimonial financial proceedings, but can provide a short term solution.

Legal Services Payment Order
If you cannot reasonably afford to obtain legal advice and have applied for external funding from one or two potential lenders and have been unsuccessful, if it has not possible to obtain a charge over assets recovered in the proceedings such as entering into a Sears Tooth Agreement, and all this can be evidenced in writing then, since April 2013 it is possible to apply for an interim order, seeking that your spouse pays your legal fees, there are various factors that the court must consider before granting such an Order. This can be an order to pay regular monthly payments and can be backdated or can be for a one off payment specifically for legal fees in matrimonial financial proceedings.

Your Regular income
If you are unable to finance your legal advice from your own resources by your regular income, then please consider one of the alternative options.

 
 
Please bare in mind loans must be repaid and interest can apply, therefore the cheapest form of finance is from your own resources.

A pragmatic and conciliatory approach between the parties will often result in a swifter resolution of the issues and will consequently minimise cost and reduce the legal fees incurred.

Please Contact Us for an appointment so we can provide tailored advice to your particular circumstances and what funding options are available for you.