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Sacrificial altars and schedule 1

Following on from last week’s slightly technical pensions blog, and the previous week’s technical explanation of the niceties of a Supreme Court judgment, we are once again bringing you a slightly technical blog. This one arises from an interesting case about how to fund litigation concerning children. As concerns about how to finance legal disputes are usually uppermost in the minds of people going through separation, we thought this was one worth flagging up.

It is a decision of one of our more high profile and flamboyant judges, Sir Nicholas Mostyn, who has a way with words, and concerns an application for financial support for a child made under Schedule 1 of the Children Act 1989.

First a brief reminder of what that is all about.

An application made under Schedule 1 allows a parent who lives with a child to obtain a lump sum, housing fund or even a transfer of property from the child’s other parent, if there is money available. It is distinct from child maintenance, but can be used to top up child maintenance where the paying parent is a very high earner. The claims are brought for the benefit of the child, not the parent. Successful applications can act to provide some parity between the homes of the child’s parents during his or her minority. Financial support will only usually last until the child reaches 18 or finishes education, after which property can revert to the non-resident parent.

Now, the case we are looking at was brought under Schedule 1, but is not about that provision specifically, but rather about costs and funding the litigation.

The case was brought by two female civil partners (referred to as JG and MG in the judgment) who had arranged to have a child with JF who had acted as sperm donor. The child is 7 years old. He lives with his mothers and had contact with his father. Unfortunately the relationship between the mothers and the father broke down and serious difficulties began to arise in contact, which then broke down entirely. Unfortunately the parents ended up in court sorting out contact arrangements and other specific issues relating to the health and education of the child.

The mothers had instructed barristers. They had increased the mortgage on their property to pay costs, but still owed fees to their barristers and to the experts who had been instructed earlier in the case. The father also used a barrister. The child had his own legal representation funded through legal aid.

The court listed a final hearing for which the mothers needed legal representation, but they had by this stage run out of available funds. They were not eligible for legal aid, so their only recourse was to seek an order that the father fund their legal costs. This was the application before the judge on this occasion.

The mothers were making an application for costs funding, not a costs order: a technical but important difference. A costs order is a punitive measure for unreasonable conduct in the litigation, whereas a costs funding allowance is more akin to an interim lump sum payment to cover legal fees. Of course, to the payer the difference may seem academic.

In this case, if legal aid for private children proceedings had not been removed, the mothers would have been entitled to legal aid. The father would not have been ordered to pay their costs, as he had not been in any way unreasonable. However no legal aid is available, and the court found that to make the mothers represent themselves would put them at a huge disadvantage when the father was represented, possibly amounting to a breach of their rights to a fair trial. The only realistic source of funding was the father.

In acknowledging that some people might say it was grossly unjust to make the father pay for the legal representation of his opponents, the judge was clear that the problem had arisen due to the Government’s decision to remove legal aid from family cases. He said: “in the field of private children law the principle of individual justice has had to be sacrificed on the altar of public debt“.

The mothers were awarded a costs allowance to cover 80% of their historic unpaid legal fees (around £20,500), and the father was also ordered to pay for 80% of the therapeutic work designed to rebuild his relationship with his son. The judge put the blame for this “sorry state of affairs” squarely at the feet of the Government.

It is likely that these sorts of applications will become more frequent. If you would like to speak to us about Schedule 1, costs, or any other aspect of family law, you can reach us on 01223 443333.

 

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