Frequently Asked Questions
Funding my Divorce
Am I entitled to claim costs from the other person in the case?
The general rule in financial divorce disputes and children cases is that each side pays their own costs.
In divorce cases it is possible in the divorce petition to claim all or some of the costs from the other party. These costs relate to the costs in connection to the divorce procedure only and are awarded at the Decree Nisi stage of the divorce.
Is it possible to fund my family law case by a “no win no fee” system or on a contingency fee basis?
Unfortunately it is illegal to offer a “no win no fee” system nor can we accept a percentage of the value of the case at the end of the case as this is also illegal.
Do you offer a fixed cost service?
Yes we offer a Fixed Cost Divorce Service for £500 including court fees and VAT. The service is designed for undefended and uncontested divorce proceedings where you know your spouse will cooperate. The service includes the drafting of all legal documents necessary for the pronouncement of Decree Absolute and all correspondence between you, the Court, your spouse and their solicitors.
We do not offer a fixed cost service for financial divorce disputes or children cases. For these cases we charge by the hour and full details of our charging structure together with an estimate of how much the case is likely to cost is provided in advance in our retainer letter.
What options do I have if I cannot afford solicitors’ fees?
There are various options.
The first is legal aid. Although this firm does not carry out any legally aided work, you can ascertain whether you are eligible to receive legal aid by visiting the Legal Aid Eligibility Calculator on www.communitylegaladvice.org.uk/en/legalaid/calculator.jsp
This site provides information about legal aid and how to find out if you are eligible. You may still be eligible if your case is being dealt with in England but you are living abroad.
If not, a bank may help you out. It is possible to negotiate a bank loan so your solicitor is paid as usual during the case. Some banks will fund your costs coupled with an irrevocable undertaking to be repaid out of the settlement. They may also agree to ‘roll up’ the interest payments into the final payment, so that no repayment is made before the case is over. This is not an unusual procedure, and there are a few banks that specialise in providing this type of funding.
It is also possible to apply to the court for an order for funds to be made available either out of your spouse’s income, or by some sort of capital distribution to enable the parties to meet their costs. There are ingenious ways of doing this – but the capital has to be available in the first place. The court will not make an order for payment of legal costs out of the other party’s income unless there is absolutely no other way of having the costs paid. That must include your solicitors refusing to enter into a ‘Sears Tooth’ agreement.
What is a ‘Sears Tooth’ agreement?
A Sears Tooth agreement is a deed that assigns the client’s settlement to the solicitor, to enable them to cover their costs incurred in acting for the client and out of which they will be paid first and in full, when the case is over. If such an agreement is signed by the client and witnessed – after full legal advice – by an independent solicitor, it will be upheld by a court if a dispute about it arises in the future. A lump sum settlement awarded in a financial divorce case can be legally assigned in this way. Once signed, the Sears Tooth agreement must be disclosed to the court and to the other party in the case.
How many solicitors will accept a Sears Tooth agreement?
Not too many, however each case depends on it merits and the individual circumstances of the client. It can be quite a risk for the solicitors, especially if the case itself poses a risk. Furthermore, based on the agreement, the solicitors must fund the disbursements in the case. These include court fees, third party fees such as surveyors’ costs and barristers’ fees. If anything goes wrong, then the solicitors will be left out of pocket.
How can I minimise my legal fees?
Here are some ways you can minimise your legal fees:
1) Act swiftly
If your divorce drags on, costs will mount. Prepare details of respective finances with supporting documentation as soon as possible.
If you still cannot agree on financial matters after discussions with your spouse, consider issuing an application to court. Issuing an application will provide a timetable for the resolution of financial matters and can save legal costs in the long run.
2) Get your timing right
If at all possible, don’t separate just before the end of a tax year, as you will have little time in which to consider the most tax-efficient arrangements. For example, you may incur a bill for capital gains tax at a time when your finances are particularly vulnerable.
In the eyes of HM Revenue & Customs, transfers of assets such as property and company shares result in no immediate capital gains tax liability, as long as they take place in the tax year during which you separate.
3) Make interim arrangements for bills and debts
Even if your divorce proceeds swiftly, it will be months before a final settlement. Don’t ignore debts and decisions about who will pay them. If you cannot agree, you can apply to the court for an interim order, but this may not be cost effective. Alternatively, see if the bank will help until the house is sold.
4) Save, don’t spend
Don’t begin spending money wildly as a form of “payback”, or because you want to keep it for yourself. Some spouses retaliate by spending as much as they can on credit cards or withdrawing money from joint bank accounts and investing the money into a hidden account in their sole name or the name of another. The court has power to add back wasted monies, so you may be left worse off in the long run.
5) Use a collaborative lawyer or a mediator
Collaborative law is becoming popular, in part because legal fees are often relatively low. Spouses and lawyers sit around a “negotiating table” and discuss issues. They aim to agree on a fair outcome for both parties and agree a settlement, while keeping the couple out of court. Alternatively, use a mediator. Mediation is a process in which an impartial third person helps parties to reach their own agreed and informed decisions about some or all of the issues relating to or arising from the separation, divorce, children, finance or property. Mediation fees can often be shared between the parties.
6) Beware of deliberately low offers and valuations
This happens when the wealthier spouse attempts to push the other party into a corner. For example, a spouse may try to obtain a “clean break” settlement even though a “clean break” would be a highly unlikely outcome in court and where ongoing maintenance is likely to be ordered. These offers are often inadequate and are based on low valuations and are made in the hope that the spouse will cave in because they are concerned about legal costs and wish to avoid lengthy and costly litigation. In those circumstances consider applying to the court for an order for funds to be made available out of your spouse’s income.
7) Do not sign anything until you have taken legal advice
Although it is normal to want to end the pain of a relationship breakdown as soon as possible; avoid signing any legal or business documents until you have had the opportunity to obtain independent legal advice.
8) Keep valuing the assets
Keep valuing assets until the case is sorted, especially if it’s taking time. Know the full value of what you are settling for, particularly pensions.
9) Cash is king
Cash is king in a recession, but remember, other assets can go up and down in value.
10) Avoid agreeing to Mesher orders
A Mesher order postpones the sale of the marital home until a specified event takes place such death, remarriage or a child of the family reaching its majority or finishing their education.
These types of order originated in 1980, when the Court of Appeal permitted a wife to remain in the marital home with one child until the child’s 17th birthday, or until further order of the court. Such orders were popular during the last recession, when there was often insufficient capital to rehouse a newly divorced mother and her children. The difficulties surfaced when the houses came to be sold. In many cases, the mother discovered that despite inflation, there was still insufficient equity in her share to enable her to buy another property. In some cases, the woman was left worse off, because her reduced time left in the workplace meant she was unable to raise a mortgage.
With the current recession, Mesher orders are coming back into fashion. Avoid them, if possible. It is preferable to downsize and own 100% of a new home, than own 66% of a more expensive property that someday may have to be sold.
11) Know what to do if your spouse goes bankrupt
Don’t be blind to this possibility. If you suspect your spouse is going to declare bankruptcy, make sure your solicitor gets you into court and obtains a court order as soon as possible. If the worst happens, you may still be entitled to stay in the family home for a year and you can still claim your share of that property’s equity.
Some spouses go bankrupt deliberately, to avoid debts and payment of any financial settlements. In one case reported earlier this year, a husband declared bankruptcy despite earning £100,000 a year and driving a Rolls-Royce Phantom. His bankruptcy was later annulled, and he was ordered to pay his wife £1m.