A little light on legal services orders

I’ve spoken here often about the legal aid cuts that were implemented on the 1st of April 2013. One of the measures that the Government introduced on that day to try to alleviate the effect of the cuts was the new legal services order, whereby in divorce proceedings or financial remedy proceedings following divorce one party to the marriage can be ordered to pay a sum of money to the other party, to enable them to obtain legal services for the the proceedings. The provision was brought in by section 22ZA of the Matrimonial Causes Act 1973.

There have been very few reported cases regarding the use of section 22ZA, so it was interesting to see one crop up on Bailii the other day, even if it does date back to the early days of the operation of the section, in June 2013. The case has been previously reported elsewhere, but I did not pay it much attention then. I haven’t seen any figures for how often section 22ZA orders have been made since April 2013, but the dearth of reported cases suggests that they have been quite rare, therefore doing little to help those who would have been eligible for legal aid prior to that date. In any event, it was possible prior to April 2013 to use maintenance pending suit orders to cover the legal costs of the recipient party – see below.

The case I am referring to is EM v AK. It concerned contested financial remedy proceedings, in which the parties were arguing over assets worth just over £3 million. As we shall see, most of the assets belonged to the husband and therefore the wife could not use assets available to her for the purpose of obtaining legal advice and representation. The wife had only a very modest income. The wife therefore sought, and obtained, a legal services order, in the sum of £40,200. However, this was not sufficient to cover all of her costs of the proceedings and she therefore returned to the court shortly thereafter, seeking a further order, this time in the sum of £52,000. This application was refused by Mr Justice Moylan.

I have gleaned four things from Mr Justice Moylan’s judgment.

Firstly, legal services orders are only likely to cover a discrete part of the proceedings, rather than the entire proceedings. This, of course, makes perfect sense, as no one knows until late in the proceedings when they will be concluded. Here, the £40,200 award was calculated by reference to the cost of an anticipated three day hearing to deal with a preliminary issue regarding the ownership of assets in the husband’s name, as the husband had originally contended that most of those assets were held by him for his son. In the event, the husband conceded that the assets were his, and the hearing was therefore no longer required.

As to the wife’s second legal services order application, Mr Justice Moylan stated that he did not consider it would be appropriate for an order that extended beyond the financial dispute resolution hearing (‘FDR’), and indeed the wife did not seek such an order. Obviously, the matter could have reached a compromise at the FDR (investigating whether a matter can be settled is the primary purpose of an FDR) and if it had done, then no further (substantial) costs should have been incurred.

Secondly, the case demonstrates what might happen if proceedings for which the legal services order was envisioned do not in fact take place. Here, as mentioned above, the anticipated three day hearing was not required. The wife therefore had more of her legal costs covered than expected. As one would expect, Mr Justice Moylan considered that the existing order could cover the wife’s anticipated costs up to the conclusion of the FDR (some £14,400), with the balance being used to pay costs that the wife had incurred prior to the first legal services order application. Quite what would have happened if the wife did not have other outstanding legal costs is not clear – presumably, if there is any unused ‘balance’ of a legal services order at the conclusion of the proceedings, then the paying party will receive credit for that in the final financial remedies order.

Thirdly, the case also demonstrates that, despite the fact that when legal services orders were brought in it was specifically provided that maintenance pending suit orders may no longer be used to require one party to pay to the other party money for legal services, but there may still be a connection between maintenance pending suit and legal costs. Here, one of the factors that Mr Justice Moylan stated he took into account when making no order on the wife’s application was the fact that he had just awarded her maintenance pending suit of £3,000 per month.

Finally, the case makes it clear that a second application for a legal services order may not be used as a ‘second bite of the cherry’. Here, in the wife’s second application she sought an order covering previously incurred costs that the judge considering her first application had already decided should not be covered by a legal services order. Unsurprisingly, Mr Justice Moylan was not prepared to re-open a matter that had already been considered by another judge.

Read the judgement here.