There is a new Domestic Abuse Act, providing recognition that domestic abuse is not only physical abuse but also includes emotional, coercive, or controlling behaviour including economic abuse; invisible to many but equally damaging to the victim. This change is a long-awaited turning point in family law. Lara Myers and I discuss the rise in economic abuse, a form of controlling behaviour, which unfortunately many of their clients have been a victim of.
Economic abuse is when one party controls the family finances, leaving the other party feeling vulnerable and unable to escape the relationship. Economic abuse comes in many forms; it can mean the restriction and imposition of very strict limits on the other party’s spending, compelling them to ask for money every time they need it. They may also be denied any information about the family’s financial circumstances.
Long-term exposure can damage the victim’s self-confidence and self-esteem – they may have been prevented from working or even socialising with family and friends if they do not have the money to do so. This behaviour will have inevitably prevented them from having any financial independence whatsoever. They often do not realise for some time that what they are experiencing is a form of abuse. In many cases, one party may even have lost their career and their confidence to return to it.
Funding to seek a divorce
People in this position are often anxious about issuing a divorce, as they are not sure where the funding to engage a solicitor will come from. As family solicitors, we often then find ourselves engaged in detailed negotiations with the side that holds the purse strings to force them to fund the required payment of legal fees, but there are alternatives available.
Ongoing maintenance allowance
When divorce proceedings commence, each party will require funding to carry on their usual day-to-day activities. When a client has been denied access to family resources, they may be unable to afford to meet their daily living costs. They may therefore choose to apply for interim maintenance, providing them with a monthly payment for living costs until the conclusion of the divorce.
An Order for advanced payment of legal fees
A Court order can be sought for the other party to release marital/joint funds to pay for the legal costs. However, the court may expect the client to instead take out a litigation loan where that is possible (see more on this below).
Borrowing from friends and family
A client may be able to borrow from friends or family to pay their legal fees. These are likely to be interest-free. However, the risk is that the loan will be treated as a ‘soft debt’ by the court, and while a client might genuinely need to repay this debt, the court may not factor it into their final settlement.
Independent legal and living costs loan
A client may be able to take out an independent litigation funding loan to meet their legal fees as well as money to fund their living costs. This is done by borrowing against their future settlement.
A litigation loan is likely to be recognised by the court as a ‘hard debt’ and must be included in a potential settlement. The loan and accumulated interest will only have to be repaid when the settlement is received. This option may well be preferred by clients who have experienced economic abuse as they will not be dependent on their spouse’s compliance with a court order or agreement to meet their legal fees and living costs.
If economic abuse has affected you and your family, the family team at Ince is here to support you on the path to financial independence. Please get in touch for further information.