The problem here is that there are a lot of costs involved in taking an ex-partner to court over and above the lawyers’ actual hourly rate.
I have had a couple of successes very recently in the area of co-habitation property disputes such that I am able to give good general guidance on this issue.
One of the cases was a £100k + figure claim by a lady who instructed me to fight for a decent share of the property she bought with her ex-partner many years ago.
I have also had a recent enquiry in a similar case which raised the same issue – a ex who may be wealthier and can play the “my lawyers are bigger than your lawyers” game and intimidate a ex-partner into settling for a derisory amount.
I deal with other areas of no win no fee in other blogs, but for this one I want to deal with the problems of disbursements; the costs of actually getting your ex-partner (and it could be a business partner, not just a romantic relationship) and the difficulties that the current legislation enacted in 2015 has put in the way and how to overcome them.
The biggest change in March 2015 was to court fees, which have gone up astronomically, to simply bring your claim. Of course a defendant can sit and wait to see if you are “man” enough to actually put your hand in your pocket. The ex-partner may already be fearful, let alone having to simply write a huge cheque to issue proceedings. Here are some example fee bands before and after:
£300,000 Before: £1,720 Now: £10,000
£250,000 Before: £1,515 Now: £10,000
£200,000 Before: £1,315 Now: 5% of the claim value
£150,000 Before: £1,115 Now:5% of the claim value
Massive changes. Where on earth are you expected to find the money? The problem is you may already have been using a conventional solicitor and paying them money, but when it comes to issue, where are you? Suddenly they are asking you for £10,000 JUST to get the ball rolling!
And then there is the further issue of ATE Insurance and other disbursements. What are the costs of those? They too could be £10,000, and even though you only pay the premium if you win (out of your winnings) you may be required to pay up-front £1,000 or £2,000 deposit, probably non-refundable even if you lose.
You will also have issues along the way: additional court fees / expert report / counsel’s fees for interlocutory hearings / applications etc. etc. These could be £1,000 or £10,000. At least they can be claimed from the other side if you win and can also be covered by the above insurance if you lose.
And thirdly, there is the issue of the “success fee”. This is the uplift on their hourly rate they are allowed to impose, but the law has changed so that, along with ATE insurance premiums, you cannot claim the success fee from the other side if you win. This is in fact the 25% “contingency part”.
So the problem is that the solicitor may have told you that it is no win no fee, but is it really? Fortunately in these types of cases there is a way, but it does need a solicitor who is geared up for this type of work and who can cashflow the litigation and has the nerve not to settle under pressure. He also has to be prepared to assist you with funding the above, which he is allowed to do.
Not all solicitors – in fact not many at all – want to do this because of the risks of losing and getting nothing AND even losing out by having part-funded disbursements. You need to find those that do. Who will, quite fairly in my view, ask you to put up a % of the property to pay them for the risk.
28 May 2016