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How to fund your family law case

Solicitor Matthew Taylor advises how to deal with financing legal proceedings following a high profile divorce case last month..

With already incurred legal costs of £403,000, estimated future legal costs of £420,000 and a monthly budget for the wife of £43,350 (down from the £100,000 monthly spend during the marriage) it is not immediately easy to see how the recent mega money case of LKH v TQA AL Z [2018] EWHC 1214 (Fam) has any relevance to the vast majority of family law cases.

However, this case, like many others, deals with the thorny issue of the funding of legal costs for financial remedy and children matters. Although the sums may be astronomical, the principle of the financially weaker party being unable to fund legal advice to compete with a wealthier spouse or ex-partner is a common one.

Nevertheless, there are still several options available to help pay for legal advice:

Use savings or investments

If you have savings to utilise or investments that you can cash in, this is the most straightforward option.

Legal Aid

Since April 2013, legal aid in family law cases has been restricted to cases involving domestic abuse, care proceedings and for child abduction cases. Strict eligibility tests apply and this means that for the majority of people legal aid is no longer an option.

Borrowing from friends or family

Whether from the bank of mum and dad or a very generous friend, many people borrow monies from friends or family to fund their case. In financial proceedings, the court can take into account the need to repay a loan to a third party. Anyone entering into an arrangement to borrow money for legal fees should enter into a contemporaneous loan agreement to avoid the court taking the view that it is a ‘soft loan’ which will not be repaid.

Personal loans and credit cards

If you have a sufficiently good credit rating, you may be able to use a personal loan or credit card. Be warned however, these will attract interest rates – sometimes extremely high ones – so shop around to ensure that you get the best rate.

Litigation loan

Where there is a lack of cash but there is a property that will be sold or retained and which can be remortgaged at the end of the case, specialist providers can offer litigation loans (although not for children disputes). These are usually secured with a charge over a property and therefore often require the consent of the spouse where, for example, the family home is in joint names…. READ FULL ARTICLE