Litigation Funding in Family Law
If you’re involved in a family law dispute and are concerned about the costs, litigation funding family law, also known as third-party funding, may provide a practical solution.
Litigation funding is a financial arrangement that helps you cover legal fees and related expenses during your case.
This option is particularly useful if you lack immediate funds but have strong legal grounds for your claim.
What is Litigation Funding in Family Law?
Litigation funding in family law refers to financial support provided to individuals involved in disputes such as divorce, property settlements, or child custody cases.
This type of funding can come from specialised litigation funding providers, legal firms offering deferred payment plans or court-ordered financial support from the other party.
In family law, litigation funding is often used when one party has limited financial resources, while the other party holds significantly more wealth. By securing funding, you can continue to pursue your legal rights without financial strain.
Key Takeaway: Litigation funding can provide financial relief if you are facing financial barriers while pursuing your family law case.
How Does Litigation Funding Work in Family Law?
The process of securing litigation funding typically involves the following steps:
- Assessment of Your Case: Funding providers will assess your case’s strength, the potential outcome, and whether your claim has reasonable prospects of success.
- Funding Agreement: If approved, you’ll sign a funding agreement outlining the terms, repayment conditions, and the percentage the funder may recover from your settlement.
- Funding Disbursement: Funds are usually paid directly to your legal team to manage legal costs throughout your case.
- Repayment: If your case is successful, repayment is made from the settlement or court-awarded funds. If unsuccessful, you may not have to repay the funding, depending on your agreement.
Key Takeaway: Litigation funding providers typically cover your legal costs upfront, with repayment linked to your case’s outcome.
Types of Litigation Funding in Family Law
There are several types of litigation funding options available for family law disputes:
- Private Litigation Funders: Specialist companies that provide funding for family law cases, often charging a percentage of the final settlement.
- Deferred Payment Arrangements: Some law firms offer flexible payment options where fees are deferred until your case concludes.
- Court-Ordered Litigation Funding: The court may order the wealthier party in your case to contribute to your legal costs, particularly in disputes involving significant financial imbalance.
Key Takeaway: Depending on your circumstances, you may have multiple funding options available to support your legal case.
When Can You Apply for Litigation Funding in Family Law?
Litigation funding may be suitable if:
- You lack immediate access to funds but have a strong case.
- There’s a significant financial disparity between you and the other party.
- You need funding to cover expert reports, barrister fees, or other legal costs.
- Your legal team believes your claim has strong prospects of success.
If your dispute involves complex asset division, hidden finances, or ongoing property negotiations, litigation funding can provide financial stability during proceedings.
Key Takeaway: Litigation funding can be particularly helpful when you face financial disadvantage but have a compelling case.
Benefits of Litigation Funding in Family Law
Litigation funding can provide several advantages, including:
- Access to Legal Representation: Funding ensures you can hire experienced family lawyers without upfront costs.
- Reduced Financial Pressure: By covering legal expenses, you can focus on your case rather than financial concerns.
- Improved Negotiating Power: Knowing your legal costs are covered allows you to confidently pursue fair outcomes without settling early due to financial pressure.
Key Takeaway: Litigation funding allows you to focus on achieving the best outcome in your family law case without immediate financial strain.
How to Apply for Litigation Funding in Family Law
If you’re considering litigation funding, follow these steps:
- Consult Your Lawyer: Discuss your situation with your family lawyer to determine if litigation funding is suitable.
- Research Funding Providers: Choose reputable litigation funders with experience in family law cases.
- Prepare Supporting Documents: Provide details about your case, your financial position, and any relevant court orders.
- Review the Agreement: Carefully read the funding agreement, paying close attention to repayment conditions.
Key Takeaway: Taking a structured approach when applying for litigation funding can improve your chances of securing financial support.
Is Litigation Funding Right for You?
Litigation funding may be a suitable option if you’re committed to pursuing your family law case but face financial obstacles. By understanding the available options, benefits, and risks, you can make informed decisions about how to manage your legal expenses.
If you’re uncertain about litigation funding or require tailored advice, speaking with a qualified family lawyer can provide clarity on your best course of action.
Director of Melbourne Family Lawyers, Hayder manages the practice and oversees the running of all of the files in the practice. Hayder has an astute eye for case strategy and running particularly complex matters in the family law system.
