US v SR

A legal services payment order is directed principally to securing appropriate legal representation for the future. It is not a surrogate inter partes costs jurisdiction. The court must consider whether the applicant can reasonably fund the litigation from another source, including by obtaining a loan, while applying the statutory factors in the context of the particular proceedings. In part-heard litigation, historic unpaid costs may be relevant where failure to meet them would affect the applicant’s ability to obtain appropriate representation. The assessment is fact-sensitive and may take account of the litigation history, anticipated costs liabilities, available liquid assets and fairness between the parties.

The applicant wife sought funding for her outstanding and anticipated legal costs in extant financial remedy proceedings. The application concerned approximately £127,577 to be released to her solicitors from frozen offshore funds. The respondent husband sought a further release of approximately £60,000 for his own projected costs. The proceedings had involved extensive fact-finding, serious disclosure issues and a forthcoming five-day final hearing. The central issue was how the statutory legal services payment order jurisdiction should be applied to fund both parties’ representation to the conclusion of the proceedings.

1. Legal services payment order principles. The application fell under ss.22ZA and 22ZB of the Matrimonial Causes Act 1973. The court applied the guidance in Rubin v Rubin [2014] EWHC 611 (Fam), including the requirement to consider the statutory matters, the applicant’s ability to obtain appropriate legal services without payment, the availability of a loan or other funding, and the respondent’s ability to pay.
2. The jurisdiction principally concerns future access to appropriate legal services. It must not be used to outflank or supplant the principles governing inter partes costs. However, historic unpaid costs may be taken into account where failure to meet them would prevent the applicant from obtaining appropriate legal services in the future.
3. The wife established that she could not reasonably fund the litigation from other sources. The evidence showed that further borrowing was unavailable, she had no earned income, limited liquid assets and substantial liabilities, and her existing litigation funder would provide no further advance. Her need for continued representation was reasonably assessed at £127,577, subject to set-off for any proceeds from the BMW sale.
4. The part-heard nature of the litigation and the husband’s serious disclosure misconduct were material. The court had previously indicated that a substantial costs order would probably be made against him. The postponed and presently unquantified liability could properly be taken into account when assessing the funding application.
5. The husband had approximately £275,000 in other liquid or potentially liquid assets. Refusing him a further release from the frozen fund would not cause undue hardship. The wife’s application was granted and the husband’s application for a further £60,000 was refused.