Legal Service Payment Orders: An Alternative Solution
The cost of legal advice can be a real concern for people going through divorce or financial remedy proceedings.
This can be particularly difficult where one spouse has access to significantly greater financial resources than the other. Without funding, the financially weaker party may struggle to obtain advice, understand their position or take part in the proceedings on an equal footing.
In some cases, a Legal Service Payment Order, often referred to as an LSPO, may provide a route forward.
What is a Legal Service Payment Order?
A Legal Service Payment Order is an order requiring one party to make payments to the other party so that they can obtain legal services for the proceedings.
LSPOs were introduced under sections 22ZA and 22ZB of the Matrimonial Causes Act 1973. The purpose is to help ensure that both parties can access legal advice and representation, even where one spouse is in a much stronger financial position than the other.
An LSPO is usually considered in the context of divorce and financial remedy proceedings. It may cover legal fees already incurred, future legal costs or a combination of both, depending on the circumstances.
When might an LSPO be needed?
An LSPO may be relevant where one party cannot reasonably fund legal representation themselves and does not have access to other suitable funding options.
This can arise where one spouse controls the family finances, where assets are held in the other spouse’s name, where funds are tied up in property or business interests, or where one party has little or no independent income.
Traditional funding routes may not always be available. Litigation loans, commercial borrowing or other funding arrangements often depend on affordability, creditworthiness, available security and the likely outcome of the case.
Where those options are not realistic, the Court may be asked to consider whether the other party should contribute to the applicant’s legal costs to allow the proceedings to be conducted fairly.
What will the Court consider?
An LSPO is not automatic. The Court will look carefully at whether the order is necessary and fair.
The applicant will usually need to show that they cannot reasonably obtain legal services without the order. The Court will consider whether the applicant could fund their legal advice through other means, including:
Their own income or capital;
Borrowing or litigation funding;
Support from family or others; or
Other realistic funding options.
The Court will also consider the paying party’s ability to meet the order, the reasonableness of the costs sought, the stage of the proceedings and the overall fairness of making the order.
A properly prepared application will usually need clear evidence of the applicant’s financial position, the funding options that have been explored and the legal costs being sought.
What have the courts said about LSPOs?
The leading authority on LSPOs remains Mostyn J’s decision in Rubin v Rubin [2014] EWHC 611. In that case, the Court gave detailed guidance on the principles that apply when deciding whether an LSPO should be made.
More recent cases have shown that LSPO applications remain highly fact-specific. The Court may make an order where there is a clear funding imbalance and the statutory test is met, but it will also scrutinise whether the applicant has explored other realistic funding options, whether the costs sought are reasonable and whether the Court has jurisdiction to make the order.
The practical point is that an LSPO should not be treated as a first resort. It can be a valuable option in the right circumstances, but the application needs to be properly evidenced and carefully prepared.
Are LSPOs available in every family case?
No. LSPOs under the Matrimonial Causes Act 1973 are most commonly relevant to divorce and financial remedy proceedings.
Different considerations may apply in other types of family proceedings, including children proceedings. The availability of any legal costs funding order will depend on the type of proceedings, the legal basis for the application and the facts of the case.
This is why early legal advice is important. A solicitor can help identify whether an LSPO may be available, whether another form of funding may be more appropriate and what evidence would be needed.
Why early advice matters
Funding legal advice can be one of the first practical problems that arises in financial remedy proceedings.
If one party has access to legal representation and the other does not, the imbalance can affect the way the case is negotiated and presented. An LSPO may help address that imbalance, but the application must be carefully considered.
The Court will expect the applicant to have explored other funding options and to provide clear evidence. A vague or unsupported application is unlikely to be enough.
How Jones Nickolds can help
Legal Service Payment Orders can be an important option where one party cannot otherwise afford proper legal representation in divorce or financial remedy proceedings.
They are not suitable in every case, and they are not guaranteed. However, where there is a clear imbalance in access to funds, they may help ensure that both parties can participate in the proceedings fairly.
If you are concerned about funding legal advice in divorce or financial remedy proceedings, our family law solicitors can help you understand the options available, including whether an LSPO may be appropriate.