Many families in Australia feature traditional roles with one party being the primary breadwinner and the other party being the primary homemaker and parent. If a couple decides to separate, payment of legal fees to help obtain a fair settlement can cause stress for the party who has sacrificed their career to stay at home and care for the children. This can be particularly problematic if the separation is acrimonious.
Sometimes, parties are able to obtain loans from friends and family members for payment of legal fees, however for many, this is not the case.
Generally the Family Law Act requires each party to bear their own costs in a family law matter, regardless of the outcome of the case.
However, there is long standing authority in the Family Court that recognises the need for an “equal” or “level playing field”, particularly in cases where there is significant financial disparity between the parties.
Section 117(2) of the Family Law Act allows the Court to make orders for the payment of legal costs in some circumstances.
If the Court does make an order requiring one party to provide a payment to the other for legal fees, (often referred to as “litigation funding”) the Court can make different types of litigation funding orders for example, a lump sum payment, or a “dollar for dollar” order.
A costs order can be made requiring one party to make a one-off lump sum payment to the other party, if there is sufficient liquid assets in the property pool. The quantum of that lump sum payment can depend on the complexity of the case.
A “dollar for dollar” order is an order requiring each dollar that is paid to one party’s solicitor, to be paid to the other party’s solicitor. While this may not be ideal in all cases, this type of order can assist if there is a smaller property pool with little to no liquid assets, but the other party has a significant income.
When considering whether to make a costs order in a family law matter, the Court must have regard to factors such as the financial circumstances of each party, whether either party is in receipt of legal aid, the conduct of the parties, whether proceedings have been commenced due to non-compliance with previous orders, whether written offers have been exchanged, whether one party has been wholly unsuccessful with their case or any other relevant matter. The notion of a “level playing field” is one which is fundamentally in the interests of justice and an important matter to consider when deciding whether it would be appropriate to make an order for the payment of legal costs.
If parties own a property and do not want to commence proceedings to obtain litigation funding, another option is to obtain a loan for litigation funding. These finance providers look at the prospects of that party’s case and can provide a loan for payment of legal fees, which is usually secured by a caveat on the title of that property.
If you would like assistance with securing funds to obtain a fair settlement after separation or require legal advice, Dorter Family Lawyers and Mediators are expert Family Lawyers who specialise in all areas of family law and mediation, and can assist. Please contact us on (02) 9929 8840.