image-description

Gaining Access to Funds during Family Law Disputes

Income Protection Claims are sometimes a problem

Family Law litigation can be a stressful and difficult time.

Typically in family law matters there is a disparity between the financial positions of the parties. One party may be struggling to meet living expenses and legal costs after separation, while the other party may have access to, and control the bulk of, the matrimonial property.

Alternatively, one party may be worried that the other party is deliberately eroding the assets or divesting themselves of property, in an effort to thwart the other party’s family law claim.

Both of the above scenarios are clearly ‘unfair’ and result from an imbalance in the parties’ negotiating positions.

This situation has long been identified by the Family Court as unjust and the Court has said “There is…[a] highly relevant matter that distinguishes litigation under the Family Law Act from ordinary civil litigation: that is the fact that very often the wealth of the parties is controlled by one rather than both of them“.

So what can be done to ‘even’ things up?
It is possible, in certain circumstances, to obtain Interim Orders from the Court which provide for the premature distribution of funds to one or both of the parties. This Order is made on an interim basis and provides immediate funding to a party, to be applied during the course of the litigation, while the balance of the matter is determined by the Court.
Such an Order can relieve considerable financial strain and bring the parties to a more ‘equal’ position, where they can both financially support themselves and fund their family law litigation, pending the final outcome. Orders can be made as interim property orders or as interim costs orders, depending on the circumstances of the matter.

The Court has complete discretion in determining applications for interim funding and whether or not an Order is made will depend on the specific circumstances of the case.
If a party can establish that:

  1. there is a financial imbalance between the spouses;
  2. there are funds available for immediate distribution;
  3. one party needs access to the funds and the other party can afford for the funds to be paid to that party; and
  4. the amount sought by the claimant is less than the amount they are likely to receive on a final basis,

then it is likely a Court would order an interim distribution of funds in their favour. In those circumstances, we are often able to avoid court proceedings by spelling out the law and our client’s needs, and negotiating an early release of funds by agreement.

If you would like further information about interim property distributions in Family Law matters or have any questions regarding Family Law disputes, please contact the Family Law Team at Watkins Tapsell.