George Williamson and Katie Alexiou

George Williamson and Katie Alexiou

Managing Director and Co-founder at Level

Level’s George Williamson and Katie Alexiou on no fault divorce becoming law

This year sees a huge cultural shift in UK divorce law – in February, the justice secretary confirmed he will bring ‘no-fault’ divorce in legislation, enacting the reform in the next session of parliament.

Until now, unless both parties agreed to a divorce and were willing to wait two years to be granted it, the party applying had to prove either ‘unreasonable behaviour’ or adultery.

The Supreme Court case Owens v Owens, in which a wife had to stay married to her husband of 40 years due to so-called ‘flimsy’ evidence of unreasonable behaviour, had a big part to play in the change of law, moving it away from an antiquated system.

In an ideal scenario, clients will keep allegations anodyne enough that they aren’t antagonising their ex, but detailed enough that the judge is satisfied that divorce is justified. However, what has been happening all too often as a result of the UK’s blame culture, is parties exaggerating the other’s behaviour, wrongly thinking that this will lead to them being granted a more favourable financial settlement.

It is crucial to get proper legal advice from the start as misconceptions like these are rife when it comes to divorce law. It is only in extremely rare cases that demonstrating blame will lead to a better financial settlement – in actual fact, all it does is have a detrimental effect on the ability to split the finances fairly, while racking up legal bills.

Planning for a divorce means thinking from the start about the individual’s financial situation. All too often one party is in a weak financial position, unable to pay for proper legal representation and receive what they deserve by way of settlement. In the meantime, their ex is quickly gathering together a top legal team that will ensure their client gets the best possible deal. This can happen when family equity is tied up in a business, a trust or property, or it may be that the financially stronger party has always had sole access to the family funds and won’t release them for the ex to get good legal advice.

This is where litigation funding is a very strong option, allowing a divorcing individual to receive a loan to cover their legal fees on the basis that the entire loan plus any accrued interest will be paid back when they receive their settlement.

The world of litigation funding has changed dramatically over the past year or two, with many players having entered into a market that was previously dominated by just one firm. Funders should be FCA-approved (though surprisingly not all are) meaning they must lend responsibly.

Where previously one party may have been at a disadvantage, unable to access legal advice of a decent calibre, this sort of funding means individuals can be placed on a more level playing field – often crucial to getting a fair settlement.

All litigation loans have just one upfront cost: getting independent legal advice on the loan itself. The borrower can draw down from a maximum facility provided by the funder as and when invoices for legal fees are due. Interest is charged only on the amount the individual draws down. A small set up fee can either be rolled into the loan and paid at the end, or be paid upfront.

One option when funding litigation is providing a separate ‘top up’ for living expenses while finances are being ironed out.  This option means not having to make expensive applications for interim maintenance. And if a friend or family member has provided a short-term loan, this also allows them to pay it back. A borrower may have taken a loan with every intention to repay it, but a judge is nevertheless more than likely to perceive it as a soft debt on the balance sheet. By contrast, a living expenses loan from a litigation funder will be more likely to be taken into account because it will show as a hard debt on the asset schedule.

Provided there is a clear route to repayment, a lot of funders will lend for proceedings relating to children or unmarried couples. Funding will also cover alternative dispute resolution methods, including arbitration or mediation.

With no-fault divorce becoming law, the family law community can move away from getting embroiled in the culture of blame between divorcing couples, and instead can put all of its focus on fairness of outcome.