Getting your spouse to pay your legal costs.

Rodney Hylton-Potts, Lawyer

Since 1 April 2013,  the family courts have had the power to make a legal services order, which is a new form of interim order compelling one spouse to make provision for the other’s legal costs.

Historical position
The new provisions go beyond the family courts’ power to make a costs allowance within a maintenance pending suit. Since the decision of Holman J in A v A (maintenance pending suit: provision for legal fees) [2001], the definition of ‘maintenance’  was interpreted to be wide enough to include a monthly provision for the payment of legal fees. The threshold was a high one as the applicant would need to show the following: that if they did have assets, they could not reasonably be deployed towards the payment of legal fees; or that the applicant could not raise a loan; or that they could not provide security for legal fees.

Power to make orders
The new Legal services orders stand alone and are not a form of lump sum or periodical payments order. Such orders can be made in divorce, nullity, judicial separation proceedings and Civil Partnership proceedings, and provide that the court may make an order requiring one party of the marriage/partnership to pay to the other an amount for the purpose of enabling the applicant to obtain legal services for the purposes of the proceedings. Such orders may be made for a specified period or for a specified part of the proceedings, for example of up to Financial Dispute Resolution (FDR) hearings.
Costs allowance orders under A v A are a form of maintenance pending suit, and payments towards costs were therefore made on a monthly basis. By contrast, a legal services order may be made as a one-off payment, a payment in installments or a deferred payment. Such orders can also be varied where there is a material change in circumstances. An order can be made on more than one occasion within proceedings.
Factors to consider
The judge must have regard to the following:
•    The income, earning capacity, property and other financial resources which each of the parties has or is likely to have in the foreseeable future. ‘Earning capacity’  includes any increase in earning capacity which, it would be reasonable to expect either party to take steps to acquire.
•    The financial needs, obligations and responsibilities of the parties either now or in the foreseeable future.
•    The subject matter of the proceedings, including the matters in issue.
•    Whether the paying party is legally represented.
•    Steps taken by the applicant to avoid all or part of the proceedings, whether by proposing or considering mediation or otherwise.
•    The applicant’s conduct in relation to the proceedings.
•    Any amount owed by the applicant to the paying party in respect of costs.
•    The effect of the order or a variation on the paying party. In particular, the judge must consider whether the order is likely to cause any undue hardship to the paying party, or prevent them from obtaining legal services for the purposes of the proceedings.
The judge must not make a legal services order unless it is satisfied that without the amount the applicant would not reasonably be able to obtain appropriate legal services for the purposes of the proceedings or any part of the proceedings.
Also the judge must be satisfied, in particular, that the applicant is not reasonably able to secure a loan to pay for the services, and is unlikely to be able to retain the services by granting a charge over any assets recovered in the proceedings.

The applicant should ordinarily produce letters from at least two banks providing a negative response to a request for a loan; however, bearing in mind the number of specialist firms that lend against litigation claims, at least 2 letters from specialist firms would also be wise.
The success of an application may therefore hinge upon what is reasonable or not. If the rate of interest offered is high or the terms of the potential funding unacceptable to the applicant, can it be argued that they cannot reasonably secure a loan?

The applicant will also need to show that he cannot grant a charge over assets recovered in the proceedings, such as under a Sears Tooth v Payne Hicks Beech agreement.