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Divorce: Out of Control Legal Fees

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It is not uncommon for those going through a divorce, to bemoan the high cost of their legal fees. However, most couples' fees will be eclipsed by those generated in the case of Aloke Ray and Charoo Sekhri. To date, they have together spent approximately £850,000 on legal fees. Put another way, that is almost a quarter of their four million pound asset base.

One would hope that, for such a high level of fees, the case would be nearing its conclusion. However, that is far from true. The figure of £850,000 could well end up being only a small proportion of the couple's total legal fees for obtaining a divorce and a financial settlement. This is because, although they have each spent approximately £430,000, those fees have (apparently) only been used to establish the appropriate jurisdiction to deal with the divorce: England and Wales.

Both parties are highly educated professionals (one a solicitor and one a doctor). However, somehow they have reached a situation in which their legal fees have become completely disproportionate to the assets in dispute. This seems even more shocking considering the marriage itself lasted less than three years.

One might be tempted to think that this situation is an aberration and legal fees would never usually become so disproportionate. However, it is not necessary to look very far to find a similar case. In September 2012, it was reported that Mr and Mrs Kavanagh (both solicitors) spent just shy of £1million litigating the financial and children aspects of their divorce. At the conclusion of their case they were left with only £90,000 between them.

These cases are so newsworthy because of the high figures involved. However, spending more money than can be afforded on a divorce is far from the preserve of the wealthy. It is very easy for couples in the heat of litigation to focus on specific aspects of their case to the exclusion of the bigger picture. Unfortunately, in many cases, excessive money spent on legal fees can have very concrete repercussions. It can, for example, mean the difference between the parties being able to adequately re-house themselves or not.

For those of moderate means, the legal fee landscape is looking worse than ever. From April 2013 Legal Aid has only been available for matrimonial cases in very specific circumstances (such as where there have been incidents of domestic violence). This leaves many couples in the invidious position of having to choose between acting in person or spending disproportionate levels of the family assets on legal advice.

How do fees get so out of control?

One of the difficulties for divorcing couples is that it is not easy for solicitors to estimate how much a case is likely to cost from day one. No doubt, if either the Kavanaghs or Mr Ray and Dr Sekhri had been able to foresee their eventual legal costs from the very start they might have made different choices. However, as fees start spiralling out of control there may well come a point where it appears that the only option is to continue to litigate.

Legal fees are generally charged according to time spent on a case. Therefore, fees will depend upon how contentious a case becomes. This means that any estimate from the solicitor at the beginning of the case must be viewed with caution.

It must be appreciated that litigation is not always a choice. As Mrs Kavanagh commented, "If someone issues proceedings against you, you have no option but to go to court." While it is impossible to know the situation in her particular case, the general point is sound and often overlooked. It may take two to tango, but one highly unreasonable party can result in a very expensive divorce case.

Are lawyers to blame?

Looking at comments posted below newspaper reports of the two situations above, the general feeling appears to be that the lawyers are to blame (which is somewhat ironic given that three of the four people in question were lawyers themselves). This attitude chimes with the stereotype of lawyers as money-grabbing sharks. However, is it fair to blame the lawyers?

Divorce lawyers do not act in a vacuum. They act upon their clients' instructions. A lawyer's role is to set out the options for a client with the relevant advantages and disadvantages of each course of action. The client then decides how to instruct their solicitor.

Where does this leave divorcing couples?

So what can be learned from the two scenarios referred to above? Litigation should be seen as a last resort. It is inherently unpredictable and can appear to take on a life of its own. It is more common than not for both parties to spend significant money on litigation and for neither of them to be happy with the result.

If litigation becomes unavoidable, it is important to keep a very close eye on your fees and to ask for a breakdown. This will make it possible to see where savings might be made. Check what aspects of your case you are able to manage yourself. There will be administrative aspects to every case. If you are able to undertake those tasks yourself you may well be able to save a significant amount of money.

Do not discount mediation. The Government has spent a lot of money promoting mediation and its effectiveness should not be underestimated. Mediation can allow a couple to reach a settlement individually tailored to their particular family. Surely this is preferable to having a solution imposed upon you by a Judge. In addition, Legal Aid remains available for mediation.

Finally, when it comes to reaching a settlement you can live with at a price you can afford, knowledge really is power. Understanding the legal process clearly will allow you not only to work out where you can save money on legal fees, it will also prevent you litigating only to achieve a Pyrrhic victory.

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