Why should I care about litigation funding orders?
So you need to fight a case in court. There is just one problem. You can’t afford it. This is a common problem. The cost of lawyers and court fees can really add up. You also face the risk of losing and having to pay costs orders. The Productivity Commission estimates that most people on middle and low incomes would struggle to bear the financial burden and risk of taking a case to court. While those who are on the highest incomes have the resources to afford it themselves and those on the lowest incomes (the bottom 8%) are able to qualify for legal aid, the rest of the population who are in the middle are left stranded. The financial burden of accessing justice is a particular problem in family law cases, where individuals are taking cases to court. Compared with those involved in commercial cases, individuals in family law cases are far less likely to have the resources to be able keep paying for the ever growing cost of the case. Enter litigation funding orders.
Are you socially or financially disadvantaged? You may qualify for legal aid.
What are litigation funding orders?
Litigation funding orders can help individuals to be able to afford fighting their case in court. If an individual does not have enough funds available able to continue a family law case, the presiding judge can make an interim order to ensure that they can get enough funds to continue. In the recent case of Zeng v Jing [2020] FamCA 507, Justice McEvoy said that the power of courts to make these orders find their basis in three areas of the Family Law Act 1975:
- Spousal maintenance in sections 72 and 74
- Property adjustment in sections 79 and 80
- Costs orders in section 117(2)
So how do each work?
Spousal Maintenance
People who are unable to support themselves have a right to get support from their spouse. A person might be unable to support themselves for many reasons. These include:
- The need to care for a child of the marriage who is under the age of 18
- Physical or mental incapacity
- Age
The right to get support depends on the ability of the spouse to give support.
If the court considers it proper in the situation, people may use this right to get funding for their court expenses. In proceedings between spouses, courts have suggested 3 criteria:
- The inability of the person seeking support to fund their litigation
- The relative financial strength of the other person who is required to give support
- The ability of the other person to fund their own litigation
Property Adjustment
In court actions involving property settlement, people may ask the court to order a partial property settlement to fund their case. This involves adjusting the people’s property rights. The court will assess whether “it is just and equitable to make the order”. This involves assessing the contributions, financial or otherwise, that each party has made to the property in dispute and the welfare of the marriage among other factors. If the court does make an order, it will not give more support than the amount the person is likely to receive by the end of the case.
Costs Orders
A person may also ask the court to make costs orders to fund their case. A court will make the orders if there are justifying circumstances to do so.
The 3 criteria listed above for spousal maintenance are used here:
- The inability of the person seeking support to fund their litigation
- The relative financial strength of the other person who is required to give support
- The ability of the other person to fund their own litigation
The court may also consider the conduct of each of the parties during the proceedings.
Like the property adjustment avenue, the likely outcome of the case will constrain the amount of support.
While costs orders are usually paid by other parties to the case, where there are justifying circumstances, courts may also make costs orders against people who are not parties.
So what should you do?
While the financial burden of fighting for your rights can be hard to bear, there are several avenues to get funding in the family law area. If you think you need support, it is important to consult a family lawyer who can advise you on your specific situation. The outline above may provide a good basic understanding of your options and how they function, but the decisions of courts in this area will depend on your circumstances.
Consult a family lawyer today.
