Rubin v Rubin on LSPOs

what is a lspo?

A Legal Services Payment Order (LSPO) is a court order requiring one party to make payment to another party for the purpose of enabling them to fund their legal fees. In divorce cases, LSPOs are typically made in financial remedy proceedings where one spouse has significantly greater financial resources than the other.

The power to make a LSPO was introduced in April 2013 through sections 22za and 22zb of the Matrimonial Causes Act 1973, after the Legal Aid, Sentencing and Punishment of Offenders Act 2012 withdrew public funding for most family proceedings.

rubin v rubin: considerations for the court when making a lspo

The leading case Rubin v Rubin [2014] EWHC 611 set out the applicable principles to be considered by the family court when determining a LSPO application, namely: 

• The factors set out in section 22ZB of the matrimonial causes act 1973: 

1. The income, earning capacity, property and other financial resources which each of the applicant and the paying party has or is likely to have in the foreseeable future.

2. The financial needs, obligations and responsibilities which each of the applicant and the paying party has or is likely to have in the foreseeable future.

3. The subject matter of the proceedings, including the matters in issue in them.

4. Whether the paying party is legally represented in the proceedings.

5. Any steps taken by the applicant to avoid all or part of the proceedings, whether by proposing or considering mediation or otherwise.

6. The applicant’s conduct in relation to the proceedings.

7. Any amount owed by the applicant to the paying party in respect of costs in the proceedings or other proceedings to which both the applicant and the paying party are or were party.

8. The effect of the order or variation on the paying party. 

• The principles summarised in TL v ML [2005] EWHC 2860:  

1. The court can make “robust assumptions” about a party’s ability to pay where they have been deficient in their disclosure.  

2. Where the paying party has been supported financially by a third party historically, the court may assume that the third party will continue doing so until the final hearing.  

• Other factors to consider:

1. Where the party’s claim is doubtful, their application should be judged with caution. 

2. An order cannot be made unless the court is satisfied that the applicant would not reasonably be able to obtain legal services otherwise. 

3. In determining whether an applicant can reasonably obtain funding, the court is unlikely to expect them to sell or charge their home or deplete a “modest” savings fund. But this determination is highly fact specific. 

4. Evidence of “refusals by two commercial lenders of repute” will generally demonstrate that the applicant cannot otherwise obtain funding. 

5. In determining whether a Sears Tooth arrangement can be made as an alternative source of funding, a statement of refusal from the applicant’s solicitor will generally be sufficient.  

6. It will unlikely be unreasonable to expect an applicant to take out a loan with a very high interest rate, unless the respondent offers to agree to an undertaking to meet the interest.  

7. A LSPO should generally contain an undertaking from the applicant to repay the respondent, as/if ordered by the court to do so. 

8. The court should set out what legal service the LSPO is for (and can include payment for alternative dispute resolution proceedings, such as arbitration). 

9. The court generally should not make one LSPO to cover the entire financial proceedings. 

10. Monthly instalments will generally be preferable to a single lump sum payment. 

11. If the applicant seeks an award covering the cost of making the LSPO application, their bill of costs will be considered to be reduced by the amount of LSPO made in their favour. 

12. An application must be made at least 14 days prior to the hearing and it must be supported by written evidence addressing the section 22ZB factors, as well as an estimate of the costs incurred and to be incurred. Where a hearing is sought sooner than 14 days from the date of application, the applicant’s written evidence must explain why it is “fair and just” that the time should be shortened.  

If you are considering or going through a divorce and require funding for legal services, it may be possible to order your spouse to cover your fees. Contact Vardags today for a free initial consultation with one of our expert divorce solicitors.   

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