Keep Divorce Costs Down

Twenty-one per cent of people are likely to consult a lawyer over divorce proceedings at some point in their lives, according to a recent survey, but legal costs expert Mark Ludlam warns that the experience could prove expensive.

Not all divorce lawyers are as expensive as Fiona Shackleton, famously hired by Paul McCartney and soaked by Heather Mills. However the case of insurance boss John Charman and his ex-wife Beverley, which resulted in legal fees of over £5 million, shows how lawyers' bills can add a significant amount to the cost of a divorce settlement. It follows another recent case where a couple spent the ‘grotesque’ sum of £1.6 million in legal fees arguing where the divorce case should be heard.

Mark Ludlam, a director of Legal Costs Associates, says divorcing couples should be aware of the potential costs, but can minimise these by simple steps. In high value divorce cases, appointing a professional legal costs consultant could reduce the bill by as much as 50 per cent.

According to research by Norwich Union, in 2006 legal fees in the average divorce case amounted to £1,818 per person - or £3,636 per case. However, with divorce lawyers charging anything from £100 to £500 per hour, that figure can rise substantially where a couple have significant assets and are in dispute over how these should be divided up.

Part of the problem lies the complexity of divorce law, which adds to the time and cost in agreeing a settlement. In the case of Mr Charman, judges in the Court of Appeal, while upholding the record £48 million pay-out to his ex-wife, called for a review and reform of the law in England and Wales. Mr Charman spoke out against the system, saying it was allowing lawyers to get rich to the detriment of others involved. His costs may rise still further as he plans to appeal to the Law Lords about the decision.

In another recent case Jim and Kim Moore, a British couple living in Spain, ran up lawyers’ fees of £1.5 million before their case even reached the divorce court. A high court judge agreed with Mrs Moore that the case should be heard in England rather than Marbella but described the legal bill as a ‘grotesque waste of family resources’.

Legal costs consultants - usually qualified lawyers themselves with a specialist knowledge of the rules relating to costs - are routinely used by insurance companies and public sector bodies to reduce their legal bills.

“People entering into a divorce should be aware it can be an expensive process, particularly where the couple are locked in a bitter dispute over the assets," explains Mark. 

"However there are ways to keep costs down. Don’t use your lawyer as a counsellor - be brief and to the point. Ask for an estimate at the beginning of the case and request quarterly updates. Insist that you are charged at the appropriate rate for each task, so you are not paying a partner’s rate for jobs that a more junior member of staff could do.

“In higher value divorce cases - typically where there are joint assets of over £500,000 - it is worth using a professional costs consultant as they will achieve savings well in excess of their own fee. He or she will ensure that you are being charged a fair sum for the services you receive and are not paying for lots of ‘extras’ which make the bills mount up.

“The earlier they are called in, the better. A cost consultant can typically knock 15 to 20 off your legal fees by scrutinising the bill at the end of the case, but where they are called in at the beginning, they will often cut the costs by half.”

Web Links

www.legalcosts.co.uk

Established in 1999, Legal Costs Associates offers tailor-made solutions to reduce clients’ legal costs liabilities. It offers the highest achievable cost savings in the marketplace and in 2006 it secured an average saving of 34.5% on all claims received.

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