David Salter, Addleshaw Goddard, Leeds Manchester and London. The gradual erosion of public funding over a number of years has left an increasing number of applicants for ancillary relief looking for alternative avenues of funding. Over the course of the past ten years the principle that a costs allowance may be made as a part of maintenance pending suit became established in the lower courts but the issue was not fully considered by the Court of Appeal until the 2004 case of Moses-Taiga v Taiga  EWCA Civ 1013,  1 FLR 1074. Three criteria were identified which must be fulfilled before the court could construe s 22 of the Matrimonial Causes Act 1973 to extend to maintenance pending suit including an element to fund legal costs and the requirement was added that in any event the case must be exceptional before the court would exercise its jurisdiction.
Back in the lower courts the Moses-Taiga v Taiga criteria and the exceptional circumstances test battled against differing interpretations and cases. Complex factual situations brought with them complex questions. Are all big money cases exceptional? If the three criteria are fulfilled, is the case exceptional by default? What happens when proceedings are brought in more than one jurisdiction? What rules should apply where financial dispute resolution is attempted? When the issue eventually came back to the Court of Appeal in the case of Currey v Currey  EWCA Civ 1338,  FLR (forthcoming) Wilson LJ reviewed the whole issue, cutting away the exceptional requirement and adding a fourth criterion.
This article considers all the key cases on this increasingly important subject and the ancillary issues that have been borne out of difficult cases. The costs allowance issue is also considered in relation to applications under Sch 1 of the Children Act 1989 and the new costs regime (introduced by the Family Proceedings (Amendment) Rules 2006 (SI 2006/352)). A further important consideration for practitioners which is examined here is the financial services issues which may arise in light of the recent inclination for financial institutions to fund legal costs by way of loans. See March  Fam Law for the full article.