LSPOs through an economic abuse lens

The judicial approach to costs-capping for one party in LSPO cases puts them at a litigation disadvantage and risks replicating the mechanics of financial control

The nascent discussion around domestic abuse and financial remedy proceedings has primarily focused on whether such abuse can be “conduct” under section 25 of the Matrimonial Causes Act (MCA) 1973. In contrast to Children Act proceedings, there has been limited consideration of how FR proceedings can be a conduit for continuing abuse and how this may impact the proceedings. We examine the court’s approach to legal services payment orders (LSPOs) under MCA 1973 s22ZA in this light.

The Domestic Abuse Act 2021 defines “economic abuse” as “any behaviour that has a substantial adverse effect on [the victim]’s ability to (a) acquire, use or maintain money or other property, or (b) obtain goods or services”. Restricting a former partner’s ability to fund their financial remedy proceedings by withholding funds is plainly within the definition.

Coercion and control is at the heart of domestic abuse; the ways in which abuse manifests will change as circumstances change, including with the end of a relationship. Thus even if economic abuse was not the most prominent form of abuse during the parties’ relationship, it may well become pronounced post-separation, when opportunities for control are more limited and the finances become a battlefield.

A party will only need to apply for an LSPO – asking that the respondent provide funding for their legal fees – where:

  • the applicant has minimal assets in their own name; and
  • the respondent has sufficient assets to fund the applicant’s legal fees but refuses to do so (or to do so to the extent the applicant seeks); and
  • a litigation loan is unavailable, which is usually due to the respondent’s assets being abroad, concealed, held on trust or otherwise inaccessible.

Some LSPO applications may arise from legitimate disputes as to quantum. However, the above circumstances will often arise in relationships featuring coercive and controlling behaviour. Yet the heightened risk that abuse is present in such cases, and of the proceedings and their funding becoming a channel through which coercion and control is exercised, has not been recognised or addressed in the LSPO caselaw. In fact, the current judicial approach to LSPOs – which generally involves reducing applicants’ fees below the amount assessed as needed by their solicitor and treating the reduced amount as a fixed cap, with no restrictions on the respondent’s costs expenditure – risks intensifying and facilitating an abusive and controlling dynamic.

When making an LSPO application, the applicant’s solicitor will prepare a detailed budget calculating the sum needed to progress their client’s case. Whilst in A v A [2001] 1 FLR 337, in which Holman J established the pre-statutory regime for interim costs provision, he indicated that there was no reason not to accept such budgets at face value, that approach has rarely been followed in recent years. Judges have instead adopted a number of justifications for reducing applicants’ costs budgets. The consequence is that an applicant’s solicitor is prevented from spending as much time on the case as they consider necessary, whilst the respondent is free to instruct their solicitors to spend as much time on the case as is required. This exacerbates the power imbalance between the parties and is irrational and unjust where the assets held by the respondent are matrimonial.

Reasonableness and proportionality

Judges generally assess whether the applicant’s proposed costs budget is “reasonable” and/or “proportionate”. By way of example, in HAT v LAT [2023] EWFC 162 Peel J considered the applicant’s budget “a little overstated” as he “doubt[ed] that as much solicitor time as is claimed will be required” and rounded it down from £227,321 to £200,000.[1] We are aware of much more significant reductions in the name of reasonableness and proportionality. In coercive control cases the respondent will often give poor disclosure, fail to negotiate in good faith, send voluminous correspondence etc, increasing costs, sometimes with that intention. As the respondent’s approach may not be obvious to a busy judge at an interim hearing, a costs estimate based on the solicitor’s experience of the case may appear “unreasonable”. The result may be restrictions on the applicant’s access to justice due to the respondent’s conduct of the proceedings.

In non-LSPO cases, concerns around disproportionate or unreasonable costs are addressed at or after the final hearing by way of a costs order, add-back, or reduction in the award. There is no reason this approach should not also be taken in LSPO cases. At the end of a trial a judge is in a better position to assess the reasonableness and proportionality of legal fees and there is no risk of a mistaken assessment limiting access to justice. Moor J adopted this approach in Williams v Williams [2023] EWHC 3098 (Fam), where H had not engaged at all with the FR proceedings. Moor J awarded W the sum she sought for an LSPO, noting that given her undertaking to repay if any of the money was not spent or if so directed at trial, this would not prejudice H. There is no reason this approach could not be more widely adopted.

Comparisons with the respondent’s costs

In a number of cases the applicant’s LSPO budget has been cut because the respondent’s past or projected costs are lower than theirs.[2] This is particularly problematic where the applicant has been subjected to coercive control and economic abuse, as vulnerability, anxiety and inexperience with financial matters may all be present, increasing the time needed to provide appropriate advice. As Francis J recognised in DR v ES [2022] EWFC 62:

“sometimes, a vulnerable or anxious or talkative client can spend two or three hours doing something that should have taken one … but sometimes you have just got to do it, and it is important for the husband that the wife is properly advised and that she understands what she is doing”.

This understanding needs to be more widely adopted.

Notional standard assessment

There has been a practice of deducting 15%-30% percent from the applicant’s LSPO costs budget by way of a “notional standard basis assessment”.[3] This arbitrarily restricts the applicant’s but not the respondent’s costs expenditure, and is misconceived as an LSPO is not a costs order. Where a costs order does not cover the full amount of costs the recipient must meet the balance, but by definition an LSPO applicant does not have the resources from which to do so, meaning that they will instead need to restrict the legal advice they can take (or get into debt).

That this approach is inappropriate was recognised by Francis J in DR v ES [2022] EWFC 62 and by Peel J in HAT v LAT [2023] EWFC 162. However, Peel J had endorsed the “notional assessment” approach three days earlier in Xanthopoulos v Rakshina (Rev1) [2023] EWFC 158; it is to be hoped that the HAT v LAT approach prevails.

De facto costs capping

Cobb J in Re Z (No 4) [2023] EWFC 25 and Cohen J in Xanthopoulos v Rakshina [2023] EWFC 50 made clear that “overspend” on an LSPO budget may not be recoverable, and King LJ in Xanthopoulos v Rakshina [2024] EWCA Civ 84 broadly endorsed this approach. In practice, returning to court to apply for an extension is risky, expensive, and causes delay. The applicant may, in reality, face a choice between taking on debt (if their credit rating allows) or sacrificing full legal representation – while the respondent has no such limits and, in cases of coercive control, may deliberately seek to increase the applicant’s costs after a cap has been set. The judicial approach to overspend essentially introduces costs-capping for one party in LSPO cases, putting them at a litigation disadvantage and replicating the mechanics of financial control.

Analysing the LSPO jurisdiction through the lens of coercive control reveals flaws in the court’s approach. Whilst not every LSPO case will involve an abusive relationship, many will. The current approach enables the perpetuation of abusive dynamics and puts victim-survivors of abuse at a real disadvantage in the litigation. The Family Court must do more to protect them.