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Dollar for dollar orders: ensuring fairness in legal costs

dollar for dollar orders

In today’s climate, where the rising cost of living has made covering legal expenses more burdensome than ever, what options exist for individuals seeking funds to manage these costs? A variety of orders may potentially be obtained, including the so-called dollar for dollar orders.

The family law arena is one where parties often experience inequality in terms of power and access to financial resources.  In divorce litigation, one party may have significant control over wealth and better access to resources, giving that party a clear advantage, placing them in a better position to fund their legal proceedings. This discrepancy is frequently observed in situations, for instance, where one party was the primary breadwinner while the other was the chief homemaker.

However, the interests of justice make it desirable that there is a more level playing field which enables both parties to obtain legal representation.  Despite the Family Law Act 1975 typically requiring each party to bear their own legal costs, regardless of case outcome, well-established legal authority recognises the importance of ensuring an equal playing field for litigants.

The concept of a “level playing field” lies at the heart of court considerations when determining whether it is appropriate to order the payment of legal costs. If such an order is made, it can take various forms, including lump sum payments, and what is known as a “dollar for dollar” order.

Under the Family Law Act 1975, several avenues exist for obtaining such orders, including applications for spousal maintenance, property orders, or specific orders like Barro or Hogan orders. Here, we’ll look at the specifics of dollar for dollar orders, though you can explore other types of litigation funding here.

What exactly is a dollar for dollar order?

A dollar for dollar, also known as a G&T order after an important case, is an order mandating that for every dollar paid for a financially advantaged party’s legal costs, a dollar must also be paid towards the other, financially more disadvantaged party’s legal costs.

It’s an anticipatory order, meaning one party provides the other party with funds to conduct proceedings, rather than a party receiving reimbursement of costs after litigation.  However, an order can be for legal costs already incurred, as well as for future costs.

While this approach may not suit every circumstance, and it’s sometimes regarded as an order of last resort, it can prove helpful in cases where there is a modest asset pool with limited liquidity, yet one party enjoys a substantial income, or seems hell bent on spending money on their lawyers.

When deciding on a costs order in family law matters, the court takes into account various factors, including each party’s financial situation, whether legal aid is in the mix, the parties’ conduct, and the history of the proceedings.  Applicants should also have at least an arguable case for substantive relief, and there needs to be evidence of the applicant’s likely costs.

Ultimately, the court must determine whether such an order is just and fair in all the circumstances.

A recent dollar for dollar matter

A recent case (pseudonym Cao & Trong) dealt with the issue of dollar for dollar orders.  A wife’s application for such an order was dismissed, after the court found that both parties appeared to be in significant financial difficulties with little income, large outgoings and significant debt.  Neither party appeared able to meet their own legal fees, with the judge concluding there was no satisfactory evidence that the husband had the capacity to provide such dollar for dollar funding.

The case highlights the need to ensure clear evidence can be provided to a court not only of the financially disadvantaged party’s finances, but also those of the supposedly financially advantaged party, such that it can be demonstrated that the former has the capacity to meet the requirements of a dollar for dollar order.

As noted, there are numerous options available to litigants for funding their family law matter.  To discuss which option may suit your situation, or to obtain assistance securing funds for a fair settlement after your separation, please contact Canberra family lawyer Cristina Huesch or one of our experienced solicitors at Alliance Family Law.

Please note our blogs are not legal advice.  For information on how to obtain the correct legal advice, please contact Alliance Family Law Alliance Family Law.

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