Most of the divorce cases featured recently in the press have been ones where the settlement involved the division of substantial assets between independently wealthy spouses.
In some cases, however, there is a disparity of assets between the divorcing couple and one of the spouses has insufficient funds to obtain proper advice. In such cases a ‘costs allowance’ may be made against the other spouse, requiring them to provide funds so that the other party can be legally represented.
A recent case dealt with such a situation. In this case, the ex-wife was considerably better off than her ex-husband and she had been ordered to make periodical payments to him. She wished to change this and to negotiate a ‘clean break’ agreement, by the making of a single ‘one-off’ payment. The court decided that the ex-husband did not have sufficient assets to obtain proper legal advice, so the judge ordered his ex-wife to pay an additional £10,000 per month for four months to provide him with sufficient money to finance his legal representation until the end of the financial dispute resolution process.
She appealed. She alleged that her ex-husband owed her £36,000 in respect of costs and that he had impoverished himself through unwise litigation. She also alleged that he had not made a full disclosure of his financial affairs.
The chief issue before the Court of Appeal was whether the ex-husband had demonstrated that he could not reasonably obtain appropriate advice and representation without the costs allowance being granted. For example, if he had assets, he would need to demonstrate that they were not realisable or could not be used as security for a loan. Also, the court had to be sure that he was not eligible for public funding of his legal costs.
Although the question of the debt owed to the ex-wife carried weight, the Court of Appeal was of the view that facts had been properly considered by the judge in the lower court and it would not seek to overturn that ruling.
This case illustrates the point that the courts are primarily concerned with making sure that where there is a significant disparity of assets in such cases, the ‘weaker’ spouse does not suffer as a result of being unable to secure proper legal representation. Furthermore, the Court of Appeal is unlikely to change the decision of a lower court provided it has taken proper regard of the facts made available to it.
The Court of Appeal judged that the restriction of the costs allowance to the end of the financial dispute resolution process was a deterrent to spinning out the dispute and did not amount to an improper inducement to settle prematurely.
Says “In divorce proceedings, having less wealth than your spouse should not prevent you from getting proper legal support.”