What is a legal services payment order?

A Legal Services Payment Order (LSPO) is an interim order that you can apply for if you need money from your ex-spouse to settle unpaid legal fees, so that you can afford to pay for the services of a solicitor (or  barrister, payments to the court, or other legal fees), for the proceedings that still to come. Introduced in April 2013, LSPOs were created at least partly to help fill the gap left by the withdrawal of legal aid for most family matters, though to date, they have been very little used.

An application for an LSPO has to include particulars about the legal fees you need paying, and a detailed estimate for the anticipated work involved in the remaining proceedings. The court can limit the award of an LSPO to a specific time or a specific portion of the proceedings. Equally, if more money is required, the court can issue more than one LSPO or vary the terms of an order to reflect a change in circumstances if necessary.

An LSPO is mainly intended for legal costs relating to divorce and financial proceedings. It can also be used for alternative dispute resolution such as legal costs for mediation. It doesn’t form part of any other payments to you from your ex-spouse, such as money for you to live on; it’s a completely separate payment.

In applying for an LSPO, you must prove that:

•  you don’t have assets that could reasonably be used to pay off the legal fees;
•  you can’t borrow the money in the form of a loan on reasonable terms (from a bank or a litigation funding specialist);
•  you haven’t been able to come to an arrangement with your solicitors for them to deduct what you owe them from what you might win if your case is successful ( a Sears Tooth agreement).

In considering the application, the court will weigh up the financial circumstances of both you and your ex-spouse, and consider the effect of the order on them if they have to pay. The Court will consider matters such as:

• Will it cause them undue hardship?
• Will it prevent them from being able to pay their own legal fees?

If your ex-spouse’s financial situation isn’t clear, the court will make ‘robust assumptions’ about their ability to pay.

The court will also take into account, among other things, what the proceedings are for, and what steps you have taken to resolve them before taking things to court (such as proposing mediation or attempting to negotiate a reasonable settlement offer); and your conduct regarding the proceedings to date.

Since the judge may not know your ex-spouse’s exact financial position, and is working on estimates of costs, it may be that at the end of the case, the court may require you to repay an amount to your ex-spouse, once the full cost of the proceedings is known.

An LSPO will only be granted in exceptional circumstances.

If you have any questions relating to LSPOs, other orders or financial matters with regard to your divorce, do not hesitate to get in touch with Andrew Isaacs Law for the best quality legal advice.