AM v SS
When you’re going through the emotional wringer of a divorce, legal fees are the last thing you want to contend with. But there are creative ways to ensure that cash flow doesn’t become a sticking point in these most trying of times. One such option is by applying for a Legal Services Payment Order (LSPO). Applications for a LSPO are made when one party does not have the financial means to pay their legal fees.
In 2013, Vardags represented a wife in a successful application for a LSPO against her husband. The application allows judges to order the financially stronger party to contribute towards the financially weaker party’s legal fees under the Matrimonial Causes Act 1973.
At the time, this was one of the first applications ever made for an LSPO because the law had only been changed in April that year, prior to which people had to apply for Common Law interim payments.
The husband and wife were married in 2007 and had a child the following year. In 2009, the marriage broke down. From then on there was protracted litigation as the couple dealt with the divorce and division of their assets.
The wife claimed that the husband could afford to pay her legal fees as he beneficially owned four properties (located in St John’s Wood, Maida Vale, Acton and Cairo, Egypt), two of which were gifted to them by the husband’s family upon their engagement. The husband’s case was that he did not have the funds to pay the wife’s legal fees; he argued that he only had access to one property: the flat in Maida Vale. Incidentally, the husband had valued this property at differing amounts throughout the proceedings.
In this case, Mr Justice Moylan considered whether it would be possible for the wife to retain legal representation if she was not granted the funding. He took into account other options too: whether she would be able to secure a loan or if she could use one of the assets in the proceedings as a charge for the loan.
The judge also harked back to the overriding objective (a Family Procedure Rules principle enabling the courts to deal with cases justly with consideration for all the parties’ welfare) and said it was important that the parties were on an equal footing in their case.
The judge referred to two previous cases, both of which dealt with the behaviour of the parties in question. He noted that the reasonableness of the applicant’s position had to be considered and that, where insufficient information had been provided as to finances, the court should make “robust assumptions” about the husband’s ability to pay the legal fees.
In coming to his decision, Mr Justice Moylan held that the wife’s legal fees should be paid and a LSPO order was put in place which provided the wife with a £150,000 charge against the Maida Vale property for her legal fees. A further order stated that the husband could not dispose of the Maida Vale property nor could he increase the mortgage on the property.
But the key factor in this case was ensuring that the parties were on an equal footing and that neither was disadvantaged. This case is illustrative of how a new law can be applied in practice to secure a successful outcome for clients.