Lack of transparency in legal fees on divorce, report says

Divorce solicitors’ fees are becoming less transparent, according to a survey which revealed young people are increasingly borrowing money from family and friends to fund divorces.

A report from financing provider Ampla Finance Legal followed a YouGov survey which explored issues such as how well clients feel they are being served by their solicitors and how difficult it can be to finance a divorce.

A nationally representative sample of 1,005 divorced UK adults were surveyed.

Nigel Shepherd, strategic adviser at Ampla Finance and a consultant at Mills & Reeve, said in his foreword to the report that familiar themes emerged.

“These include the importance of the professional relationship between family law clients and their solicitors (including the continued relevance of face-to-face communications in an increasingly digital age) and the need for transparency on costs”, he said.

The report revealed that the issue of solicitors’ fees topped the list of concerns around improving client service; and that more than in any other region “fees were the biggest concern for respondents from London”.

Transparency was a major issue with people under 55 more likely to say their divorce was more expensive than initially quoted compared to the older age group.

The report concluded that clarity around fees is becoming more opaque and that “the younger generation is pursuing increasingly precarious methods of financing their divorces”.

Financing a divorce was a significant issue for many respondents.

The report found 27% of people aged 55 plus sold, mortgaged or remortgaged their property to fund their divorce.

That figure dropped to 13% for younger people, reflecting the reality that they are far less likely to own their own property and needed to resort to alternative sources.

42% of people under 55 said they had to borrow money from friends and/or family to finance their divorce (dropping to 12% for those aged 55 or over); and 17% resorted to selling their belongings.

A quarter of the younger age group relied on a credit card to fund their divorce.

“Credit cards in particular can expose individuals to the risk of snowballing debt,” the report observed.

Alexie Bonavia, associate at Bryan Cave Leighton Paisner, commented: “Divorce is rarely smooth and no matter how ‘grown-up’ the parties, the reality is that there will inevitably be a number of acrimonious issues to deal with.

“It is a solicitor's duty to provide as much certainty as possible when quoting initial costs, anticipating the potential problems that may arise.”

She observed that younger couples increasingly require “family financial assistance and those who cannot call upon this luxury are now taking on the DIY divorce process themselves with outside professional guidance”.

“In some cases”, she said, “couples will find that they have no alternative but to resort to the court for a definitive resolution and incur substantial legal costs in the process”.

Firms need to reassess how they communicate information around their fees, the reports suggests.