As any family lawyer will attest, court proceedings can be prohibitively expensive. And this is especially so when it comes to contested financial remedy proceedings on divorce.
Of course, if a party has substantial means then the cost of such proceedings may not be an issue – they will be able to pursue the proceedings as far as they consider necessary to achieve their aims.
But if the other party does not possess such means they will inevitably be at a serious disadvantage.
How can such a disadvantaged party level the playing field, to enable them to fully engage in the proceedings?
One answer is to apply for a Legal Services Payment Order (usually abbreviated to ‘LSPO’).
What is a LSPO, and how do you obtain one?
LSPOs are available in proceedings for divorce, nullity of marriage or judicial separation. A LSPO is an order requiring one party to the marriage to pay to the other (“the applicant”) an amount to enable the applicant to obtain legal services for the purposes of the proceedings.
It may at first sight seem odd that one party should be required to pay the other party’s legal costs before the case has even been decided, but as we will see, the payment can be taken into account at the end of the proceedings.
To obtain a LSPO the applicant must show that without that payment they would not reasonably be able to obtain appropriate legal services for the purposes of the proceedings (ie they would not be able to retain or continue to engage a solicitor and then a barrister for their case).
Accordingly, the court must be satisfied that the applicant is not reasonably able to secure a loan to pay for legal fees and is unlikely to be able to obtain the services by granting a charge over any assets recovered in the proceedings.
When deciding whether to make a LSPO the court will have regard to such matters as the means of both parties, what efforts the applicant has taken to avoid the proceedings (for example by proposing or considering mediation), the strength of the applicant’s case in the proceedings, the applicant’s conduct in relation to the proceedings, and the effect of the order on the paying party.
As mentioned above, the payment can be taken into account at the end of the proceedings. Accordingly, the court may require the applicant to pay back some or all of the payment, from the award made by the Court at the conclusion of proceedings.
A LSPO in action
A recent example of an application for a LSPO occurred in the Family Court case DH v RH.
In that case the wife was applying for a LSPO, to cover her costs in financial remedy proceedings. The application was made some way into the proceedings, after the wife had already incurred substantial costs of some £1.3 million.
The amount sought by the wife was the sum of £531,343. This comprised her estimate that she would require some £438,000 to cover her costs to the final hearing, plus outstanding costs owed to her lawyers.
The husband opposed the application.
The judge was satisfied that without the provision of funds under a LSPO the wife would not reasonably be able to obtain appropriate legal services up to the final hearing. Accordingly, he granted the application.
However, the judge was not satisfied that the wife required as much as she estimated for her future costs, or that the LSPO should cover her outstanding costs.
He therefore made a LSPO in the sum of £372,654.
It is also noteworthy that the judge concluded his judgment with the following instructive observation:
“…the parties have now spent the best part of £2 million in legal costs on proceedings that have been ongoing now for two and a half years. Despite this, the parties are no closer to reaching an agreement on the issues between them and, at the same time, have failed to advance the proceedings to final hearing in the manner directed by the court. Unless the parties now concentrate on, preferably, negotiating a settlement of these proceedings or, in any event, preparing this matter for trial, they risk the further dilapidation of the assets they have carefully assembled during the course of this long marriage, to the ultimate detriment of both themselves and, most importantly, to the detriment of their children.”
To conclude applying for a LSPO should therefore be considered when all other avenues of mediation and dispute resolution have failed, and in all circumstances the parties should consider the proportionality of so doing.