14 April 2011 by

Divorce lawyer’s charges

With the proposed changes to the scope and availability of Legal Aid, combined with the recent recession and ever increasing cost of living, it seems inevitable that more and more people are going to have to fund their divorce cases themselves, but with less money to do it with.

“So what” some may say “Legal Aid has been a burden on the taxpayer for long enough” – however it may not be as straightforward as that.

The Court has always been able to order that one party to a marriage must pay interim maintenance to the other after divorce proceedings have been commenced to tide them over until the determination of the main hearing, however, since the ground-breaking decision in the case of A v A (Maintenance pending suit: Provision for legal fees) [2001] 1 FLR 377 this maintenance can now also include a ‘costs allowance’ to cover a parties legal costs.

The Applicant need only satisfy the Court that :-

  1. they have no assets of their own that they could reasonably be expected to use to fund their lawyer for the divorce proceedings themselves; and
  2. that they are unable to raise a loan or borrow the money to cover such costs; and
  3. that their legal representatives are not willing to enter into an agreement to postpone payment of their costs until the end of the case; and
  4. that they are unable to obtain Public Funding to be eligible for a costs allowance.

So if you are divorcing your spouse and they are unable to fund their legal costs themselves, then potentially, with the possible loss of Legal Aid in the foreseeable future, it may be down to you to pay their legal costs and not the taxpayer.

Is this really fair? Well I suppose that depends on what side of the fence you are on. It is clearly right that people should have access to justice and that there should be equality of arms in litigation, but that being said, why should one party have to take on the burden of paying the other’s legal costs in proceedings where the general costs rule is that the Court should not make an order requiring one party to pay the other’s costs?

In the case of A v A the Court got round this apparent contradiction by finding that a costs allowance is a periodical payment order (Maintenance Order) and is therefore not caught by the general costs rules – make of that what you will…

8 April 2011 by

Trusts for the Disabled, looking after vulnerable family members

Many people see trusts as a tax-saving device for the rich and irrelevant to the majority of people in the UK. In reality, trusts are much more commonplace. In its most basic form, a trust is simply an arrangement where one person (the trustee) looks after money or property on behalf of another (the beneficiary).

13 April 2011 by

Avoid the new HMRC late filing and late payment penalties

With effect from 6 April 2011, HM Revenue & Customs has introduced significant new penalties for the late filing of tax returns and the late payment of tax due.

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