Behind space exploration and warfare, it might seem hard to imagine any other endeavour that could be quite as expensive as Family Law litigation. Sadly, the financial and psychological impact of these forms of disputes are almost entirely negative and can affect some people for years if not decades. The good news is that statistically speaking, less than 5% of all family separations result in the necessity for the matter to be taken to trial and even that 5% reduces down to a much smaller probability when the warring parties choose to engage experienced Family Lawyers who are passionate about protecting their client’s interests.
Even when cases do not go to trial however, there is still usually some legal costs which each side of the separating couple will need to fund. So who does pay for the cost of these Lawyers:
- Costs Orders – Section 117 of the Family Law Act states that each side to a Family Law dispute is to bear their own costs. A judge does have the power to order the opposing party to pay one party’s costs however, this only happens in very rare cases where it becomes patently evident that one party belligerently pressed on with litigation in defiance of reasonable offers to settle or based their case on a raft of lies which was plainly evident to be untrue even to themselves. Where a costs Order is made, there is scope for a Judge to order that 100% of the other party’s costs are paid, but more commonly the “standard” costs Order only results in around 60% of a party’s costs being recovered from the other side.
- Government Assistance – Each State runs their own “Legal Aid system”. Entitlement to assistance is means tested. Full details are available on the Legal Aid Office website however, as an indicator single persons earning less than $38,000.00 per year with a home equity of less than $146,000.00 are eligible for fully funded assistance. Typically, though funding is not given to property cases and is restricted to cases where disputes over children’s arrangements are the only issue.
- Can savings or other matrimonial assets be used to pay for the legal fees? – Generally, yes. If a spouse has access to a savings account in their name or another asset that can be liquidated, then it is definitely not a crime to use those monies to pay the cost for their own legal representation. There are however, obligations of disclosure and account. Generally, the other spouse must be informed as to whatever has been spent on legals and that money is usually added back to the asset pool as if it had never been spent. This is so the other spouse receives their fair chop of this money and, in doing so, is not made to fund their ex-spouse’s legal costs by subterfuge. If the other spouse is in control of all of the money or the assets, then an application can be made to the Family Court for a “Barrow” Order which can compel that spouse to pay over sufficient monies to fund the legal fees for the non-cashed up spouse. “Barrow” style arrangements can also be voluntarily negotiated between the parties. If a Barrow Order or arrangement has been made, the money paid over constitutes an asset in the hands of the receiving spouse to that value. That asset is then counted against their full property settlement entitlements when the final property division exercise is concluded.
The cost of funding a Lawyer in a Family Law case is undoubtedly a genuine worry. As stated however, the prospects of achieving a timely and a low cost settlement does often hinge on getting the high quality help that only a good Lawyer can provide.
Part 2 of this series will discuss how legal fees might be funded from cash flow, commercial lending institutions or the law firm itself.
Michael Zande is a Queensland Law Society accredited family law specialist with over 20 years experience in the field. He is the principal at Zande Law Solicitors, Suite 7, Norwinn Centre, 15 Discovery Drive, North Lakes to contact Michael for advice phone 3385 0999.
The information in this article is merely a guide and is not a full explanation of the law. This firm cannot take responsibility for any action readers take based on this information. When making decisions that could affect your legal rights, please contact us for professional advice.