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Managing costs in complex children cases

Date:4 MAY 2021

In November 2020 Spice Girl Mel B was in the news, despairing about how the legal costs of trying to relocate her daughter Madison from the US to England were likely to bankrupt her, leading to her withdrawing her relocation application. The figure of $500,000 quoted included legal fees of $400,000 and $100,000 in accounting fees.

Mel B and Stephen Belafonte divorced in 2017 and have joint custody of Madison. The singer moved back to the UK in 2019 with her two other children, half-sisters of Madison, to take part in a Spice Girls tour. Most recently Mr Belafonte filed an application for full custody of Madison, alleging Mel B has all but abandoned her and restricting visitation to the US. The case is ongoing.

In England, custody orders, residence and contact orders have been replaced with Child Arrangement Orders referred to as “live with” and “spend time” with orders, reflecting that each parent has a pivotal role to play in a child’s upbringing. The increase in joint live with orders, sometimes referred to as shared care orders, indicates the change of ethos in the Courts. Whereas once mum was normally thought to be the primary carer, it is now considered better for children to spend significant periods of time with both parents, depending on the circumstances of the case and provided the child is will not come to harm.

The phenomenal amounts referred to in Mel B’s case may not be typical, but it is true that relocation and children cases can rack up costs. As lawyers, how can these be managed? 

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Funding options: Legal Services Payment Order (“LSPO”)

Often, one parent is less wealthy than the other and traditionally, although not exclusively, this has been the mother. One method of attempting to balance this is by an LSPO, with the wealthier parent ordered to provide a fighting fund to meet the other’s estimated legal costs for some or all of the proceedings.

There are many hoops to jump through to get an LSPO granted in proving to the Court that the client cannot secure funding through formal or informal loans, income or liquid capital. Applications must be made promptly and dealt with separately to the substantive application. Careful cost estimates need to be given, allowing for the unexpected – otherwise a further application may have to be made, causing delays and further acrimony.

In reported case LP v AE [2020] EWHC 1668 (Fam) the Honourable Mr Justice Cohen heard an appeal against an order in which HHJ Tolson QC refused to make a further LSPO of £99,000 for solicitors and counsel fees to the mother in a complex children’s case where the mother had already received a LSPO of £35,000 for legal services up to the fact finding hearing, in circumstances where the mother had changed solicitors since the fact finding hearing.

He allowed the appeal, noting that in a case of complexity the mother should also be entitled to the services of a barrister and solicitor (as the father had), and substituted an award of £40,000 allocated between counsel and solicitors, apportioned between two further hearings. He determined that the mother should not recover any costs incurred, due to her instructing new solicitors and as a result of the delay of two months due to the LSPO application being issued.

It was a sad reflection in this case that the parents collectively spent more on the legal costs of the appeal than the sum sought by the mother for the LSPO, when efforts could have been made to compromise - a matter remarked upon by the judge. 

Unbundling services

Some parents try to keep costs down by undertaking elements of the legal work themselves. Most commonly, the solicitor is only instructed for a hearing, while the client deals with correspondence. For example, the client may write a statement, with it being passed to solicitors for a final read through.

Of course, this can result in the case becoming more complicated, as the overall management of the case is not in the solicitor’s hands to the same extent. The process of taking instructions for a statement for a client or witnesses helps in ensuring evidence is probed at the time, further lines of enquiry followed up and a view taken on client/witness credibility and reliability. Dealing with correspondence will ensure that a barrister or solicitor is fully prepared for Court and conferences.

It’s imperative to manage client expectations from the outset and put all advice in writing. Consider carefully in a complex case whether it is appropriate for you to act on this type of retainer and be mindful of this being charged as a fixed fee given the potential for the matter not being purely a review and read through.

Legal Aid: trapped capital

Archaic LAA rules concerning trapped capital in assets has long led to access to justice being denied to those who are otherwise eligible for Legal Aid on income and can access the required gateway evidence.

In the recent landmark decision in R (on the application of GR) v DLAC and Anor [2020] EWHC 3140 (Admin), the applicant, a survivor of DV who had fled the jointly owned family home, successfully challenged the LAA’s refusal to grant her Legal Aid for family proceedings due to “imaginary” capital in the jointly owned family home. She was on UC, could not borrow against the property or obtain a loan and had no other means by which to fund the litigation. Self-representation would have led to a breach of her Article 6 and 8 rights and would run contrary to the guidance in PD12J.

The Court determined that the Director of Legal Aid Casework has a discretion to value capital other than money on an equitable basis. This means that it is possible for ‘trapped’ capital to be excluded by attributing it a ‘nil’ value if it can be argued that the client cannot practically and effectively use the property to purchase legal representation in order to obtain access to justice.

This should be considered in all cases where the client would pass the means assessment but for the existence of the trapped capital. The LAA should be asked to look at any previous cases where Legal Aid was refused prior to the judgement of 24 November 2020.

Legal Aid rules have now been amended so that when valuing a person’s property, the full value of the mortgage should be disregarded.

Litigation funding

Specialist companies provide loans for the funding of cases even in children’s matters, but they require a route to payment. This can be difficult, even if a client owns or part-owns a property, as there is no guarantee they will want to sell it. Interest on such loans can be high, typically 18 percent. More traditional routes to finance may be better to consider: a mortgage, loan or even a credit card. The client must understand the implications of this debt.

Relocation cases

Under English law, where once the presumption was in favour of the relocator if they were the primary carer and had well-thought out plans, now the emphasis is on best interest only and how the relationship will be maintained with the left-behind parent. Careful thought has to be given to maintaining and financing those arrangements, and how the left-behind parent’s contact rights may be enforced in the new country should the arrangements break down.

In one of my own cases AY v AS and A [2019] EWHC 3043 where the mother, a Kazakh national, had had little success in finding employment in the local area following breakdown of the marriage despite her considerable qualifications, Mr Justice Mostyn - whilst accepting her opportunities were limited locally - determined that her application to relocate her young child to Kazakhstan was premature. With consent of the father and in the circumstances of this case, she was uniquely granted a Specific Issue Order permitting her to relocate with the child within England if she secured employment.   

Managing family law cases

HHJ Wildblood in the case of Re B (A Child) (Unnecessary Private Law Applications) [2020] EWFC B44 sent a warning to lawyers that the Court cannot be involved in micro-managing private law arrangements, such as being asked to decide how a child should spend their Sunday afternoon. His determination: cases should only be brought if necessary, warning of sanctions and criticisms for lawyers.

Our own ethos has always been to work with our clients to help them consider what alternative solutions there may be and manage the client’s expectations of the Court process and what can realistically be achieved.

As a family law specialist working on many complex international and national cases involving separated parents and children, we keep our client at the heart of what we do. We advise ways of avoiding acrimony, supporting our client to come to an agreement with acceptable compromises if at all possible. Mediation is useful here; if parties can reach an agreement between them, it is more likely be adhered to than if an order is made, will cost them less and may provide a window for them to remain amicable.

We also recognise that sometimes Court is the only route. By providing strategic advice based on experience, we will always seek to minimise costs for our client.

In the case of Mel B there has been so much acrimony, so much money spent on legal fees - and no doubt so much of a negative impact on the child involved. Sadly, there are no winners in this situation

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