Legal Services Payment Orders – an underutilised tool?
1. Clients often struggle to pay their legal fees, there are many occasions where clients do not pursue meritorious cases due to the weight of fees.
2. Legal Services Payment Orders were created in 2013 when the Legal Aid, Sentencing and Punishment of Offenders Act 2012 cut large areas of legal aid, meaning far fewer people can access legal advice. In fact only one in four people can now access legal aid.
3. The LSPO was hailed as a new measure to fill the gap that legal aid provision left behind. In reality, very few LSPO’s are sought and even fewer are granted. This article will attempt to explain the criteria the courts will apply in the decision making process and provide practical guidance as to how a case can be issued.
The Statute:
4. Section 49 (2) of LASPO 2012 provides:
Orders for payment in respect of legal services:
(1) In proceedings for divorce, nullity of marriage or judicial separation, the court may make an order or orders requiring one party to the marriage to pay to the other (“the applicant”) an amount for the purpose of enabling the applicant to obtain legal services for the purposes of the proceedings.
…
(3) The court must not make an order under this section unless it is satisfied that, without the amount, the applicant would not reasonably be able to obtain appropriate legal services for the purposes of the proceedings or any part of the proceedings.
(4) For the purposes of subsection (3), the court must be satisfied, in particular, that –
(a) the applicant is not reasonably able to secure a loan to pay for the services, and (b) the applicant is unlikely to be able to obtain the services by granting a charge over any assets recovered in the proceedings.
The test:
(3) The court must not make an order under this section unless it is satisfied that, without the amount, the applicant would not reasonably be able to obtain appropriate legal services for the purposes of the proceedings or any part of the proceedings.
Material factors – ability to secure alternative funding:
6. Any party seeking LSPO needs to persuade an assure the court that they have pursued all avenues to obtain a loan and they have not been able to do so. All the attempts to secure a loan should be clearly detailed in the witness statement supporting the application.
7. The witness statement will need to clearly address whether the Applicant has any savings or other valuables that can be used for the purpose of legal fees. The car is often overlooked – it may be possible to sell an expensive vehicle and use a cheaper vehicle in order to pay one’s legal fees.
8. A statement should address the attempts to secure loans from the following sources:
a. Family members
b. Friends
c. Banks d. Litigation loan providers
d. Litigation loan providers
e. Pawnbrokers [if there are valuable chattels]
9. If there is any real estate the Applicant will need to explain if attempts have been made to re-mortgage or secure a second mortgage on the real estate. Full particulars will need to be provided to explain why this is not a feasible option.
10. The Applicant will also need to explain whether their Solicitor is able to wait for payment on the conclusion of the case. If not, this issue should also be mentioned in the statement.
How much and how often?
11. A key concern is how much will the court grant and how soon will the payment come in. The payment terms depend on the circumstances of the case. The statute grants the court wide ranging powers, this includes:
(6) An order under this section may –
(a) provide for the payment of all or part of the amount by instalments of specified amounts,
(b) require the instalments to be secured to the satisfaction of the court.
12. In short, the court has the power to order the full amount at the outset or part of an amount. The court will also consider monthly or even weekly instalments from the Respondent. It is critically important to clearly specify in a statement exactly how much is being sought and when the sums are needed.
What will the LSPO cover?
13. Section 49(10) helpfully clarifies what “legal services” mean in relation to proceedings. Notably, “legal services” also include alternative dispute resolution such as mediation and arbitration.
How do I apply?
14. A LSPO is an interim order – it is not a final order consequently the Part 18 procedure applies per Family Procedure Rules 2010 – 14 days notice must be given.
15. The Application must be supported by a written statement [FPR r 18.8(2)] and the statement must include a detailed estimate of the costs already incurred and to be incurred.
Costs:
16. As the LSPO is an interim order – the no order principle does not apply to interim applications [FPR r.28.4]. The court can make an inter partes costs order. 17. If costs are sought, a statement of costs should be filed at court and on the Respondent no later than 48 hours before the hearing.
The applicable case law:
18. The reported cases are mainly addressing “big money” cases and issues. in FRB v DCA (No 3) [2020] EWHC 3696 the court decided that it would not be reasonable for an Applicant to remortgage their home or spend all of their small savings.
19. In JK v LM [2024] EWHC 1442 (Fam) Cobb J. decided to make a LSPO in favour of the Applicant Wife, part of the reasoning was that the Husband has been unforthcoming about his finances. Furthermore there was a large income disparity between the parties, the Wife was of modest means and the Husband was wealthy however he went to great efforts to present a diminished economic position.
20. In Jardaneh v Jardaneh [2022] EWFC 201 – when a party fails to pay the sums due under the LSPO the court may consider an application for committal for a failure to pay per section 5 of the Debtors Act 1869.
Aysha Miah
33 Bedford Row
27.10.2024