Monthly Archives: April 2014

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New Service Helps Couples Fund Separation

Resolution Logo

In the face of legal aid cuts, many couples are struggling to fund their divorces and a lot of related court cases involve no professional legal representation at all. To combat this Resolution, a national family lawyers’ organisation, have teamed up with Iceberg Client Credit to offer manageable funding options to separating couples.

In recent months, couples pursuing a divorce have come under attack financially from two fronts. Apart from the legal aid cuts, which have removed legal aid from many of the cases in family courts, the 2014 budget has also hit these couples hard. Specifically, the budget included changes to the way tax relief works on properties that are owned by divorced or separating couples. Previously, a partner could claim tax relief on such properties for a period of three years even if that property was being occupied by the other partner, as long as they did not declare any other home as their tax free residence. Now, the tax relief period has been cut in half to just eighteen months, leaving many couples worse off in the early years of divorce.

There are some funding options for divorces are already on the market, but these are largely aimed at those on higher incomes or on more costly cases. The new scheme offered by Resolution and Iceberg is unique in that it is available to couples on low incomes who are struggling to obtain expert advice or representation during proceedings since the legal aid cuts hit.

The service is available to legal firms that are members of Resolution and to their clients. The loans will carry preferential rates, and only after proceedings are complete will repayment be due. The introduction of this service has been widely welcomed as it is beneficial for both clients and legal professionals. Clients get the obvious advantage of manageable loans to fund expert help with their divorce proceedings, while legal firms are able to offer vital funding to their clients without putting their own assets at risk.

Jo Edwards, incoming chair of Resolution, expressed delight at the successful implementation of the service. Edwards said: “This will help our members to help more people – something we’re all keen to do, but has become more challenging since the cuts to family legal aid just over a year ago.”

The Law Society also welcomed the partnership between Resolution and Iceberg, with a spokesperson saying that “any initiative which helps solicitors to make their services more accessible to potential clients in the wake of legal aid cuts is welcome.”