In Australia, Litigation Finance may have found a new niche—Family Court. Some would say that the Sydney registry of Australia’s Family Court is already highly adversarial. The court is known for wealthy divorcing couples playing out their acrimony in a public setting. Legal teams often seem to encourage this.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
In Australia, Litigation Finance may have found a new niche—Family Court. Some would say that the Sydney registry of Australia’s Family Court is already highly adversarial. The court is known for wealthy divorcing couples playing out their acrimony in a public setting. Legal teams often seem to encourage this.
The Sydney Morning Herald details one couple whose legal fees topped $6 million in less than five years. The wife in that couple ultimately signed away 30% of her settlement in exchange for third-party litigation funding. She claimed that her ex’s lawyers made multiple ‘ludicrous’ applications meant to drain her resources.
One family law attorney, Daniella Ruggero, decried the normalization of litigation funding in Family Court. She explained that many family lawyers advise their clients to seek out litigation funding because it gets them an upfront payment for legal fees.
It’s been asserted that the Sydney registry is weighed down with protracted legal skirmishes between wealthy divorcing couples—and that they’re using time and resources at the expense of less-wealthy litigants.
Runaway legal fees are a growing concern in Australian courts. Jacoba Brasch QC, president of the Law Council of Australia, has said that the law does not allow fees that are not fair, proportional, or reasonable. She affirms that the Law Council takes allegations of overcharging very seriously.
Still, one man unknowingly retained a lawyer who had been sanctioned by a judge for running up unnecessarily high legal fees on spurious matters. An assessor found that the man had been charged nearly twice what he should have. Another client was charged nearly $60,000 in legal fees in under two months—which included time spent on matters a judge called ‘immaterial.’
John Walker, chair of the Australian Association of Litigation Funders, explains that Litigation Finance is unlikely to become a major player in Family Law. Most litigants would find the 15-25% fees that funders charge to be excessive and outside their budgets.
