What Is Litigation Funding for Family Law?
Litigation funding for family law can help cover legal costs when you do not have enough accessible cash to pay as your separation or divorce progresses. However, funding options differ in how they are assessed, used and repaid, so it’s important to understand which option may suit your situation.
This guide explains what family law litigation funding is, which costs it may cover and how it may help during separation or divorce.
Table of contents
What is litigation finance for family law?
Litigation funding involves a third party entering into private funding agreements with clients or law firms to cover legal fees. Here are some basic elements of litigation funding:
Repayment
Litigation funding for family law often requires repayment, usually from the property settlement. In some cases, if the case isn’t successful, the financer won’t ask for repayment.
Funding assessment
Funders may assess the likely outcome of the legal proceedings before approving funding. Funding is generally reserved for situations where enough assets are expected to be available to repay the amount advanced, interest and applicable fees.
What legal fees are covered?
Family law matters involve various costs, whether they’re resolved through negotiation, mediation or court proceedings. These costs may include the following:
Legal services
Lawyers charge for legal advice, negotiations, document preparation, mediation and court representation. The total cost can depend on the lawyer’s fee structure and experience as well as the complexity of your situation.
Court fees
Court fees may apply when filing an application or attending certain court events. Daily hearing fees may also apply after the first hearing day, depending on the court division and type of proceedings.
Expert witnesses
Expert witnesses may be required to give evidence during a hearing. Expert witnesses could include psychologists, valuation experts and other specialists. Procuring professional reports to submit as evidence can cost thousands of dollars.
Value of litigation funding in family legal proceedings
Litigation funders could offer value to family law clients due to the dynamics of divorce proceedings. It’s common in family law that one litigant will have access to much greater financial resources than the other. This may occur when one person has reduced or given up paid employment to care for children and manage the household, leaving them financially vulnerable after separation.
Access to funding may help create a more balanced position by allowing a person to obtain legal representation and meet costs as their separation or divorce progresses. This can be particularly important when negotiations or court proceedings continue for a long time and legal costs increase.
Where a person expects to receive assets through a property settlement but has limited accessible cash, litigation funding may help cover legal costs until an agreement is reached or the Court makes a decision.
Litigation funding orders
In family law cases, one person may ask the Court for an order that helps them meet legal costs while their separation or divorce is being resolved. The two main options relevant to litigation funding are:
Costs orders
The Court may order one person to contribute towards the other person’s legal costs in some family law cases. These orders are discretionary and are not available in every case.
Interim property orders
An interim property order may allow part of the property pool to be distributed before final settlement. This may help a person meet legal or living costs while negotiations or court proceedings continue.
Other forms of financial support, such as spousal maintenance, are separate from litigation funding and may apply in different circumstances.
Eligibility for family law litigation funding
Eligibility varies between providers. A funder may consider your expected property settlement, available assets, the amount required and whether enough funds are likely to be available for repayment.
Costs and risks of litigation finance
Litigation finance may involve interest, fees, security requirements or limits on how funds are used. These costs can reduce the amount you receive from your property settlement, so review the agreement carefully before proceeding.
Alternatives to litigation funding
Other options may include savings, family support, lawyer payment plans, Legal Aid, personal loans, costs orders or interim property orders. The right choice will depend on your finances and whether you can manage repayments before settlement.
Speak to JustFund about family law funding
Legal costs should not pressure you into making decisions before you understand your options. At JustFund, we provide eligible clients with a flexible line of credit that may cover family law legal fees and certain related living expenses.
You can draw approved funds as costs arise, with no scheduled repayments while your property settlement is being resolved. Interest and applicable fees are added to your account, and the balance is repaid from the funds you receive at settlement.
We assess each application based on your situation and work directly with your lawyer to manage approved invoices. Our partner firms also follow clear service expectations around communication, billing and client care.
Apply for funding today to learn more about how JustFund can assist you.
Disclaimer: The information in this article is general in nature and is not legal or financial advice. Funding eligibility, costs and repayment obligations depend on the provider, the terms of the agreement and the circumstances of the family law matter. You should obtain independent legal and financial advice before entering into a funding arrangement.
A line of credit differs from other forms of litigation funding in important ways. JustFund provides a better financing solution than other litigation funders by offering more flexibility that can be applied toward covering legal expenses and achieving a final property settlement. JustFund provides a holistic set of benefits that contribute to an optimal financial outcome.