Litigation Letter
Loan-funded divorce
An article in the
Solicitors Journal of 1 February 2011 reports that although solicitors will not usually bill clients until a settlement is finalised, other
professionals expect payment for their services as they are provided, which is one of the cash-flow problems a bank loan can
help address. At the root of the problem is the family court’s lack of jurisdiction to make interim capital orders, making
it impossible for one party to access joint assets – often held in the husband’s name – to fund the divorce proceedings. David
Pickering of DWF rejected the suggestion that such loans encouraged people to divorce. Clearly they have the potential of
unlocking divorce litigation and keep revenue flowing into law firms family departments. However, he continued: ‘People come
to solicitors’ offices because they have reached a decision to divorce. Only if they decide to go ahead with this decision
do we investigate funding options and such loans will help ensure they are in an equal bargaining position.’