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Divorce/separation

Here you'll find divorce help and support from other Mners. For legal advice, you may find Advice Now guides useful.

Litigation Loans for Divorce - Has anyone used one of these and what are your experiences of them?

93 replies

Highlandheath · 08/09/2017 10:05

I took a litigation loan out to fund paying for my divorce. My ex went for the most expensive Divorce lawyers in the UK. The litigation loan I took out was secured against the house, which I have to sell. Interest rates are astronomical, despite this being a secured loan, so no risk to the lender. Right now I am finding it almost impossible to make sense of what was done by the lawyers (I had to get other lawyers, recommended by them, to give me independent legal advice) it seems 6 loans were taken out, which would normally run for a year, however they all appear to start and end at the same time, and I appear, but can't get clarity on dates the money was actually transferred to the lawyers, to have been paying interest on money BEFORE I received it. The loans are personal, but dealt with by the commercial department. Has anyone had experience of litigation loans, and are you clear on how they were managed? If you are in a similar boat to me, I'd like to hear from you, these loans are possibly being mis sold, to women in severe emotional and financial difficulties. What's your experience?

OP posts:
Highlandheath · 30/10/2018 11:11

From my research my lawyers were in breach of all but one of the headline Principles the SRA binds them to.... My concern is that the SRA will baulk at taking on a firm of their stature, they have very famous and very well connected partners, and are one of the magic circle legal firms... They are a bunch of crooks too, but even so. Re the banking, the assets haven't been sold, yet, so none of that has been done. Novitas are not P2P, btw, as I understand it, but if they are, could you point me to where this is recorded? However back in 2014 Novitas were being funded by Ratesetter, who are P2P. Ratesetter were in receipt of a letter from the Head of Regulatory at the FCA in 2017 because they had been lending to commercial enterprises (and Novitas is a commercial enterprise), at that time. P2P are only allowed to lend on a P2P basis... lending to commercial lenders (they were also financing car loans, via car dealerships - well skanky!) They were told doing so was "potentially criminal" by the FCA and they must not do it again. They appear to have pulled the plug on investment in Novitas, whose Principals all resigned and the company was bought by Close, who still run it under the same name. It's an absolute shit show!

OP posts:
Hiddentruth · 30/10/2018 11:38

Useful relevant links. The SRA need to get complaints pouring in on all this. The Financial Ombudsman had adjudicated on one case only and anyone can access that via their past case findings. It involved Novitas and was a complaint along the lines of that which Highlandheath explains . My position is on the other side in that the loan structure was also used to misappropriate assets. I think the consortium stretches far and wide and may use enabling estate agents too as property is not being jointly instructed to market and can be sold in a deal within the investors in these loan cases.

www.sra.org.uk/solicitors/code-of-conduct/guidance/warning-notices/Investment-schemes-(including-conveyancing)--Warning-notice.page

www.sra.org.uk/consumers/problems/fraud-dishonesty/investment-schemes.page
And this is very relevant to litigation loan operations which use the Solicitors client account which it is not designed for at all. Lots of conflicting rights...after all this is joint proceeds of sale of assets being handled by one solicitor only...who is not acting in the interest of both parties ...so whose interest are they acting in....DISCUSS!?

www.sra.org.uk/sra/news/press/client-banking-warning-notice.page

I will message Highlandheath as requested, likely later today.

Pinkfog · 30/10/2018 22:51

Hello Hidden Truth,

Can I just thank both you and Highlands Heath on shedding light on so many vital issues surrounding these evil loans. I have looked through my paperwork from my solicitors today and have already uncovered a load of shady goings on, which I was too blind to see at the beginning because I was a complete emotional wreck.

A year ago my solicitors advised me that I could only apply for a LSO/provision if I failed to obtain a litigation loan. I have copies of correspondence with them telling me the following:

That if my ex failed to pay towards my everyday needs and legal fees, when he clearly had the ability to pay, then court had the power to order interim maintenance and a legal services order.

They told me that the test for funding required them to show that I was not reasonably able to secure a loan to pay for the legal services or by granting a charge over any assets.

So they decided to apply to Novitas first and told me that if they did not approve my application then they would have to try another loan provider. They insisted that it was their duty to try to obtain a loan for me before being able to apply to court.

Their sole reason or rather skewed strategy for persuading me to take out a litigation loan was because:

a) I had zero money;
b) it would pay their outstanding bill;
c) it was their way of ensuring that I had early financial visibility to assist me in trying to reach an agreement with my ex thus avoiding an application to court for interim maintence and a legal services order, which was costly.

Novitas rejected me (for good reason). However the second loan provider was a brand new company; they had only been up and running for 1 month and seemed desperate to lend £100K.

I was told to seek independent advice from one of their recommended lawyers for a fee of £500, which I did. I can't remember if she mentioned 'equitable charges and LIENS'. I do remember hesitating in signing the papers though. Wish I hadn't signed!

I recently sought further advice from other solicitors and they too said that I would need to be rejected by two loan providers (including banks) before applying for LSO.

There are examples of cases in relation to women trying to obtain LSOs with litigation loan funding:

www.familylawweek.co.uk/site.aspx?i=ed128352

Rubin v Rubin [2014] EWHC 611 (Fam)
vi) Evidence of refusals by two commercial lenders of repute will normally dispose of any issue under s22ZA(4)(a) whether a litigation loan is or is not available.
viii) If a litigation loan is offered at a very high rate of interest it would be unlikely to be reasonable to expect the applicant to take it unless the respondent offered an undertaking to meet that interest, if the court later considered it just so to order.

Hiddentruth · 31/10/2018 08:31

Hello Pinkfog...you are most welcome to knowledge gleaned in this sorry state of affairs and I am delighted to share what I know. I will come back on your reply but briefly now wanted to correct something in my post at 11.38 yesterday.,,just above your last post. The Financial Ombudsman may of course have looked at more cases but they have published only one it seems and I clarified this with them recently. Relevant to your situations of the max loan being reached very fast ...regrettably the FO did not find in favour of complainant but bet they did not know all that is out there now including the big issue of banking,,,the thing that stopped Ratesetter in how they were dealing with deposits. I need to understand all that better but in my case the solicitor bank account was used to take in proceeds of sale of jointly owned assets and from here that solicitor did all the repayments to parties named to be repaid in the court order yet they had no contract with me! They did the banking. Breach of 14.5! Serious. They said they never acted for me and indeed they gave me the shoddiest completion statement you ever saw...so this issue of who is handling monies seems key to offences. SRA are evidently looking at this and I am chewing their heels on it as they did not intervene when they could have before precious assets were mismarketed in this dodgy consortium. You guys as loan applicants have a route as a consumer to complain. I don't so easily as I am not the loan applicant. So do look up the FO case. I will reply more later and the for info as to LSO situation.

Zexoosuxy · 31/10/2018 14:36

This reply has been deleted

Message deleted by MNHQ. Here's a link to our Talk Guidelines.

Hiddentruth · 03/11/2018 11:32

Hello again...just wanting to keep this thread open as there is some Private Messaging and sharing of info going on but for the sake of anyone interested in this catastrophe affecting the financial aspects of divorce I would like to share the following knowledge.
Novitas Loan are the major player in the family litiation world. However they were caught up in dodgy dealings whereby as a lender they were borrowing from a lender, this made t commercial to commercial lending which it transpires - thanks to sharing of information by a poster here and good old google - the FCA warned the money lender to Novitas was potentially criminal. That money lender was Ratesetter. Ratesetter are the trading name of Retail Money Market Limited. Only Retail Money Market is ICO registered with the Information Commissioner. Guess what - they -Ratesetter - have 2 other limited companies one of which is dormant and they were/are operating loans using these companies. If anyone wants to know more on this PM me but companies house reveals staggering - and I mean staggering terms in documentation which these loan consortiums are affording themselves which even they say goes beyond the relevant legislation and that only a court can challenge aspects of their utter twaddle but in the event court finds any terms unlawful the rest of the terms will stand anyhow.
Basically a bunch of crooks have pitched up, offered lending to vulnerable people and have written terms in which say they can do whatever they like and are allowed to do so until somebody challenges them on it!
Do please read every single bit of small print if you have taken a loan out and it is causing you utter headaches. In my case I was not even told there was such a loan product affecting proceedings and everyone was acting totally weirdly and nothing wa happening as it shoud be in court process or otherwise. Got to the point court was facilitating corruption but there was no evidence. The evidence has been found. There were 9 court hearings on the finances and another 3or 4 on child matters. At the end of the day my human rights were breached and the court DID sell the main asset of FMH so don't think you might not be made homeless...I reckon Judges will want to stop the fees racking up and get the job done so your rights may be thrown out of the window too.
The loans are, according to their literature, suited to cases which have been rumbling through court for a long time but I say they can be used to cause financial abuse and to manipulate to get the other side to pay the legal bill racked up on them. Apparently the debt should only be taken off the settlement of the person taking out the loan but I do not think this is what is happening. I think they top slice it so that in fact the family finances are eroded before the division is done. If you don't know there is a loan..in my case...you cannot advance any proper legal argument in court. Stitched up, financially abused, lied to in court, court accepting to do final settlements without requiring full disclosure!!!! That is another human rights breach - the right to a fair hearing.
If there is any doubt the end is in sight and the loan may not be repaid they WILL sell property. You need to check if the loan has been discharged and your property - if it is coming to you is clear of any invisible equitable charges and liens held on it. None of these will show at the land registry unless they were asserting a legal charge. That is preferable would say to these invisible vultures laying claim to your assets and making up any old rule to suit them, pass it on to their mate, etc etc. Really it is that bad!
In America they call this extra bit of due diligence a lien search to check that assets are not emcumbered in any way. Not sure how that is done here but this is what the US say about it - essential reading!

www.proplogix.com/services/municipal-lien-searches
www.proplogix.com/blog/unrecorded-liens-what-the-title-search-wont-tell-you

I know this is all in US jargon but the risks are the same here - these litigation loans are formulated on a US model for commercial litigation and they use EQUITABLE CHARGES and LIENS which can remain invisible so the risk of them goes beyond any property being sold...do we know the loans get repaid...do we know if these crooks have passed on this charge they have claimed to their investors/contacts etc as per their own made up rules? How do we ensure they are cleared off?
I urge anyone to go straight to the Financial Conduct Authority and question how these loans are regulated by them because you can say say you are aware of the problems the FCA themselves have identified (look up Ratesetter and Rhydian Lewis and google it all how they stopped lending commercial to commercial and have now started doing their own direct loans) and go to the Solicitors Regulatory Authority - SRA - and lodge complaints as your solicitor has probably led you into a situation which perpetrates dishonesty of those operating it. If you can - get the loan cleared off and get evidence it is totally redeemed. Trust nobody as everyone is covering their arses in this utter mess and be persistent. Their reputations depend on it and do not be afraid to complain. Good luck!

Highlandheath · 03/11/2018 15:37

This is a can of worms, anyone with one of these sorts of loans, please post and PM, we are getting enough of a response detailing so many shady practises, and we have strength in numbers. Your absolute confidentiality is assured though, but I know my lawyers gas-lighted me into not sharing any information on the loan even with my family - saying it would compromise confidentiality - this is your information and you can share it with whoever you like - if you have one of these loans you probably need some help! Keep on reaching out....

OP posts:
MissedTheBoatAgain · 08/11/2018 02:17

Wonder how the Legal people would have commented if this had been posted on Legal Board?

During my Divorce Ex's solicitors wanted one the cars valued at £30K to be sold and money placed in their account to draw down an estimated £2K per month for their services anticipated to be between 6 and 9 months. I ignored and told Ex that once money was in Solicitors account she would not see a penny of it as they would make sure they billed it all.

Car was sold a few months later and Ex's 4th Solicitor also wanted money to be placed in their account. Half for their fees and half for another car as according to them the available car was not suitable as it was a two seater. My solicitor told them that car that was now deemed to be unsuitable had been in family for 3 years. Plus child's school, wife's place of work, supermarkets, etc., were all within walking distance of the the Family Home and for the first 2 years of living at family home there had been no vehicle at all.

Wife's solicitors encouraged her to file for MPS (Maintenance Pending Suit) and LSO (legal services order) which by then was the third time around as previous 2 hearing had been dismissed with cost orders in my favour. 3rd MPS was also dismissed with costs in my favour as Judge ruled that as Wife had assets of her own (expensive Jewelry) she should pay her own fees. Application for another Vehicle was also dismissed on grounds that I was already proving Ex with a vehicle.

Eventually ended up at a Final Hearing and Ex was charged £8K for the privilege of her Solicitors submitting the same proposal 6 months earlier at the FDR farce with lasted maybe 15 minutes maximum at most. I was charged £2K. Even my Barrister was surprised at how much Ex's solicitors charged.

So who are the Legal Profession looking out for? Is it their clients or is it themselves? Think most on this thread have already decided?

Hiddentruth · 08/11/2018 12:00

Yes to 'MissedTheBoatAgain' your final sentence is spot on.

Evidently where divorce is concerned there is no overarching morality or duty of care to minimise conflict nor resolve it between people who undoubtedly need help at a point in their lives where they are vulnerable.

It is a bizarre situation where on the one hand divorce lawyers like to 'la,la,la' if domestic abuse and financial abuse is raised and behave like it cannot persist through the process yet in the same breath they may be offering access to a tool which causes profound harm - the litigation loan.

Instead the lawyers will lead you by the hand and waffle and do nothing and assist the domino effect, not halting or nipping harm in the bud, but facilitating conflict whilst self serving...

It is an appalling state of affairs and I am minded to write a whole new set of paperwork and put it to the government to eradicate this abuse of process where family finances are mishandled and misappropriate and fraud is facilitated. The family court needs sworn statements on oath because it is an invitation to a honeypot of lies as it stands.
The problem with this is that one is 'supposed' to tell the truth (form E requires it) but if the lawyers, the judiciary and the court are facilitating this corruption then how can a lie being revealed suddenly about-turn a lie which had been knowingly overlooked and accepted and even perpetrated by the lawyers. It is playground stuff...only admit anything when found out and backed into a corner.

All the meantime this game of who can get away without being honest and who is paying who to interfere with and gamble with legal rights is being played by so-called 'professionals' who are a discreditto themselves, their profession and to justice and they simply line their pockets while feigning an inability to make any difference to case progression.

Ok, so being a lawyer is a business...we get that. But this has gone too far.

These litigation loans are the next PPI. Justice shall prevail eventually and compensation for the losses from an absence of duty of care, breaches of trust etc etc to protect and maximise family finances FOR THE FAMILY is needed. Some of us are working on this currently.

In my view much as in deceased estates family assets should be locked down...beyond the reach of any meddling and self-serving vultures picking of the carcass of what is a tragedy - a family breakdown. Divorce is already a threat to our society...making it more catastrophic than it should be is counter-intuitive.

If people were shown to be helping themselves to the contents and items of value of a crashed vehicle with seriously injured occupants inside it there would be public outrage. And so we have the same here....

So, the judicial college (tasked by Sir James Munby in his parting comments on Direction 56) is delivering training to its Judges on domestic abuse in all its manifestations and that includes financial and economic abuse - please Judicial College ensure your training includes litigation loans and how they are structured so that your Judges do not entertain the wrongdoings that these products are designed to facilitate.

Pleased you are posting as there is clearly reflection going on as to what is happening at both sides of the equation.

Please keep the comments and useful anecdotes coming in! It is so helpful to others in what can seem a lonely path of often inexplicable behaviour.

Oh and just to say, if your lawyer starts to act weirdly without good explanation or if the lawyers on the other side start to be unreasoanbly aggressive they are all hiding something. Lawyers are human too and deflection or projection are in their toolkit. Report it to the SRA....it costs nothing and you may be glad you did.

Hiddentruth · 08/11/2018 12:26

Apologies I don't mean Practice Direction 56 I mean PD 12J

For reference the words of Sir James Munby, as then president of the family division... read down...he deals with the need to train judges and their duties ...this was his circular published at:

www.familylawweek.co.uk/site.aspx?i=ed180107

President of Family Division circular: Practice Direction PD12J – Domestic Abuse

Revised PD 12J comes into force on 2 October 2017

On 14 September 2017 the President of the Family Division, Sir James Munby, issued the following circular in respect of revised Practice Direction 12J which comes into force on 2 October 2017.

In the summer of 2016 I asked Mr Justice Cobb, who had chaired the Working Group which drew up the Child Arrangements Programme in 2014, to review Practice Direction 12J, to examine whether further amendment was needed in the light of the recommendations made by the All Party Parliamentary Group on Domestic Violence in its briefing dated 29 April 2016 and by Women's Aid Federation of England (WAFE) in its 'Nineteen Child Homicides' report published in February 2016, and to produce recommendations. His Report, accompanied by a draft amended PD12J, was dated 18 November 2016. I published it in January 2017: [2017] Fam Law 225. At the same time, in my 16th View from the Presidents Chambers, [2017] Fam Law 151, 160-161, I indicated that, with one important exception, I accepted all his recommendations.

As I had hoped, the publication of the draft amended PD12J generated comments and helpful suggestions, including from Families Need Fathers and, following a presentation they gave at the President's Conference in May 2017, from Southall Black Sisters.

Although final responsibility for any amendment to PD12J rests with me as President of the Family Division, I thought it appropriate to consult both the Family Justice Council and the Family Procedure Rule Committee. The draft amended PD12J has accordingly been considered by the Family Justice Council and, at a number of its meetings when various iterations of the draft were considered, by the Family Procedure Rule Committee, most recently on 10 July 2017. Following this, a final revised draft amended PD12 was prepared by officials, for whose assistance I am grateful, incorporating the various amendments agreed by me and by the Committee and helpfully identifying a few additional issues (none of major significance) for my consideration. I should add that, throughout this process, I have benefited greatly from Mr Justice Cobb's continuing advice, for which I am most grateful.

On 7 September 2017 I made the new PD12J, annexed to this Circular. It has since been approved by the Minister of State and will come into force on 2 October 2017. It applies (see paras 1, 3) to all judges, including lay justices, whether sitting in the Family Court or in the High Court.
PD12J will require further adjustment if and when the proposed legislation restricting cross-examination of alleged victims by alleged perpetrators is enacted. We cannot await that. Hence my decision to proceed without further delay.

The new PD12J contains numerous amendments, many of important substance. Here, I highlight only two:

• There is (see para 3) a new and much expanded definition of what is now referred to as "domestic abuse", rather than, as before, "domestic violence".

• There are mandatory requirements (see paras 8, 14, 15, 18, 22, 29) for inclusion of certain specified matters in the court's order. I appreciate the additional burden that this may impose on judges and court staff, but there is good reason for making these requirements mandatory and they must be complied with.

There have been recurring complaints in Parliament and elsewhere of inadequate compliance with PD12J. I am unable to assess to what extent, if at all, such complaints are justified. However, I urge all judges to familiarise themselves with the new PD12J and to do everything possible to ensure that it is properly complied with on every occasion and without fail by everyone to whom it applies.

The Judicial College plays a vitally important role in providing appropriate training on the new PD12J to all family judges. As I have said previously, "I would expect the judiciary to receive high quality and up-to-date training in domestic violence and it is the responsibility of the Judicial College to deliver this." The Judicial College has risen to the challenge, as many judges will already have experienced, and I am confident that it will continue to do so.

Domestic abuse in all its many forms, and whether directed at women, at men, or at children, continues, more than forty years after the enactment of the Domestic Violence and Matrimonial Proceedings Act 1976, to be a scourge on our society. Judges and everyone else in the family system need to be alert to the problems and appropriately focused on the available remedies. PD12J plays a vital part.

James Munby, President of the Family Division
14 September 2017

For the Practice Direction, click here.

www.judiciary.uk/wp-content/uploads/2017/09/presidents-circular-domestic-abuse-pd12j-substituted-pd-20170914.pdf

Hiddentruth · 08/11/2018 12:29

The reason PD12J is relevant to litigation loans is that these are products being used to undermine the very thing that is being sought to be driven out and dealt with by the family court...harm and perpetration of it and the definition now includes financial abuse.

Apparently it is ok though for lawyers and the judiciary to financially abuse...

MrsWobble3 · 08/11/2018 14:35

I've no experience of any of this so my comments may be irrelevant but in the absence of litigation loans how would the divorce be finalised? Wouldn't the party currently taking a loan be obliged to go without legal advice? You can't expect the lawyers to work without payment and there is no legal aid available. Is this really a better outcome?

Hiddentruth · 08/11/2018 14:58

Hello MrsWobble3...brilliant name btw!

What you say has validity and this is why these loans have stepped into a gap recklessly left by government.

But...and it is a big BUT...

The very way they are structured and the methods they employ interfere with justice rather than promote it.

The loan company take a charge...often an equitable charge (which does not show up anywhere) or a legal charge which is effectively a second mortgage against assets to secure their debt.

So, immediately there is a third party in the divorce...the last kid on the block to invest let us say in a family's fnances. If you are lucky if you are not the loan applicant doing the securing of debt on assets but on the other side...you may be told. If, like me, you may not be told. Utter disaster!!

This charging on assets gives them amused power. They can call in their debt. They can monitor your private court case which opens up a raft of issues like data protection because the solicitor who operates the loan in a tri-partite (3-way) arrangement with the solicitor, the loan applicant and the loan company has to report to the loan company. To what degree this is done is not really known, but it is toe curling to think your private court documetns can be passed to oan companies you may or may not know about and worse still their investors who are investing in your divorce litigation.

Hopefully that will explain a little why something which on the face of things may appear to be a good thing is far from it.

It interferes with legal rights or seeks to. The fact the Land Registry and Morgage lenders are not being informed or told about these claims on assets is staggering.

Hope that helps!

What seems like a simple solution sn't because the lawyers just bleed your assets dry as it is not in their interests to settle. In my case despite mediation being not recoomended because of estabished DV and financial abuse we offered it in desperation as the other side --complete with hidden undisclosed itigation loan... refused mediation as they simply want all court heaings to go ahead, maximum animosity and only offer arbitration or court. A barrister in court for the other side turned green when the commissioning solicitor they were acting for had not revealed to this barister that they had refused mediation.

Can of worms...

Hiddentruth · 08/11/2018 15:19

Asumed power...not 'amused' power in last threat.

Generally speaking the spouse in divorce who has access to or little income to pay for legal representation may be led to these loans which - although they say your lawyer does nt recommend them...they have nice mates round the block who will give you the 'independent' legal advice about them it seems so it is nicely self-serving.

However. Not only can the 'poorer' spouse take one out. So can the 'richer' spouse...imagine that...a tool to abuse with by willing lawyers.

Then what does the doubly disadvantaged poorer spouse do then?

Take a loan too? Fight fire with fire? Let the lawyers eat up all your assets and let the loan company try to force sale?

Be warned...stay away. The government needs to sort this out as it has made maintenance and champerty not illegal and they have not thought this through. It is a public interest issue now.

Highlandheath · 08/11/2018 15:41

Hello Mrs Wobble, good point, and this is the argument the lawyers and the loan companies put forward, that they are doing the less financially able half of the relationship a favour in allowing them access to funds to fight their case. BUT, in my case, that's not how this was presented at all, I had £70k in the bank, and a maturing endowment, I HAD funds, but the Lawyers sold, very hard, the Novitas/Ratesetter Loan, intact they said I had no choice, I COULD NOT use my own funds, and if I did that would be frowned on by a judge, as I would be going through marital assets - now, of course, that strikes me as ridiculous, the house was a marital asset too - so securing a loan against it was also going through marital assets. A few things happen when you sign on the dotted line for one of these loans, and all of them benefit the loan company and the lawyer, but NOT the client - 1. The client cannot change lawyers without being in default of the loan. So if you have a complaint or an issue with the way your case is being handled, you are stuck. 2. The loan company has vision of ALL your court documents an can influence the direction of proceedings. 3. The lawyers have control over the finances, and over their own payments, so your ability to question bills is diminished, or disappears. 4. The loans are ultra high interest, when you start out the lawyer tells you it's for £100k max, "but the divorce won't cost that", you can see from Pink Fogs post that 2 weeks before her final hearing, with everything apparently on budget and on track, the lawyers suddenly needed another £100k... that's £200k at 18% interest - do the maths! The same happened to me, and has happened to others I know. None of us would have signed the loan documents if we had been told by the lawyers "we will outspend your initial loan by £100, £200, £300k..." To sign for "up to" £100k, based on a figure of a max of £50k being needed is very different to signing up for at least £200k, probably more... but you can't leave the loan without losing representation, and you can't leave the lawyers without defaulting on the loan - default means they sell your home. It's catch 22. 5. The high interest is charged for the lifetime of the loan, but divorce is not a process with a set end date. Cases can rattle on for years, contentious cases tend to last at least 4 years, but the lawyer and the loan company are not going to tell you this, they will tell you it'll all be over by Christmas, it never is over by Christmas though. A final hearing is often far from final, a difficult spouse will mean enforcement action needs to be taken, another 3 months at 18% interest. If the loan is secured on the family home, how long will it take to sell? Another 3-6 months interest at 18%. Finally, when you are embarking on a divorce you are in one of the most distressed and vulnerable states you will ever find yourself. I'd rather give birth every day for a year than go through divorce again! If you haven't been divorced before it's all new, strange, frightening, you can't think straight, you are clutching at straws and extremely susceptible to a hard sell by a shark lawyer and a shark loan company.... And, of course, if you are going to court your divorce has officially failed the tests required for settlement via mediation - so there are going to be some pretty major issues. There are other ways of funding, that's the thing, and taking a breath, stepping back and considering these is not helped by greedy lawyers and greedy loan companies out for a quick buck. You can approach Credit Unions, where the interest is really low, you may be a union member, you may qualify for reduced rate legal advice through insurance, one woman told me she took out an interest free loan on a credit card - it was much cheaper than the litigation loan, and she had control of the lawyers fees so could kick butt if she was dissatisfied. Yes, the lawyers and the loan companies sell themselves of champions of the underdog, but they are not, they are kicking clients when they are down... they are hearse chasers!

OP posts:
MissedTheBoatAgain · 09/11/2018 01:41

The above problems have been recognized by Senior Judges such as Mostyn who have suggested caps on Legal Costs, but nothing seems to have happened so far. May wish to look at the following link:

www.forbessolicitors.co.uk/news/display/23219/as-divorce-costs-spiral-out-of-control-fixed-fee-lawyers-become-the-sensible-choice

Relates to a case where a couple whose assets were Approx. £2.9 Million were charged £920,000 in Fees. More fool the couple for not settling amicably 50:50 and walking away with almost £1.5 Million each.

KataraJean · 10/11/2018 07:31

Wow, I am sorry you are going through this.

My divorce has cost tens of thousands, but at no point did my solicitor even get involved in how I was going to pay - I just set up a monthly standing order and paid additional chunks when I could. I have not been pressed to settle within a certain time (although they add 8% interest annually so it makes sense to try to settle within the year!).

I know this is not helpful to your situation - I am just posting so people know not all solicitors are involved in this loan business and if yours is pressing you to take out a loan, find another one.

Court does rack up costs, in my case it was necessary because of child protection issues. I agree that there is a hole left by lack of government funding, but what posters are describing here is scandalous.

Hiddentruth · 12/11/2018 09:58

Thank you KataraJean for recognising the scandal here! Just responding to MissedTheBoatAgain post of 09.11.18...
The issue of suggesting 'more fool the couple for not settling amicably'...hereby lies the scandal. This third party and investor interference in a case creates incentive for lawyers NOT to facilitate or encourage settlement...for them to cook figures to potentially hide the loan existence as in my case and/or mishandle assets and prevent access by legal owner to their own property! Add into the mix any level of domestic abuse and imagine the perpetrator of abuse being the loan holder...they have lawyers threatening the ex for them...how fantastic...dirty work done by proxy.
Also the loans are done on a case by case basis. If you read the incorporation terms of Novitas and Novitas Asset Management your toes will curl. They can influence the court case by ultimately calling in their loan and forcing a sale yet these assets may be needed to house one party and or children.
So amicable may not come into it. What is needed in divorce in my opinion is a lock down of assets so nobody can pilfer or meddle as the first priority need is that of the family. Any lawyer beholden to a funder is not acting in your best interests as they have signed their own global terms with them which require the lawyer to repay the loan funder since the loan funder cannot handle your money themselves. The SRA do not permit solicitors to use their client accounts for banking...breach of their rule 14,5 so hopefully soon this cartel of self serving leeches will be found to be the new PPI scandal and those affected by infected settlements and massive loan losses will get redress and compensation.
I was refused a red book valuation of my property and the court let full disclosure be avoided. In the background...an undisclosed litigation loan and valuable land which 'went missing'. You could not make it up. So where does the corruption start and stop? Funny how the law firm has a son of a Judge in its commercial department who operate these loans...a Judge who got another to do his duty on hearing a non molestation order to get safe access to my own property...and charging me for making the application on police advice. Disgrace does not start to describe the abhorrent behaviour of so-called professionals caught up in such schemes.

Hiddentruth · 12/11/2018 12:41

Just to clarify I mean to say the police told me I needed a non molestation order and the court needed to pull their finger out. This is to safely get into my own home...the former marital home. So I apply...and court effectively fines me for doing so. The hidden undisclosed loan holders who were asserting equitable charges on my property (invisible I may add) were in breach of court requirements of disclosure yet they make me pay for a failed application on the basis I 'should have' applied through financial court proceedings for access which I should not have been denied in the first place. This helpful suggestion of court missed the point entirely. There was history of abuse, threats of violence to me and a property in the middle of the country with no escape route as I could not drive at the time. Police said they could not attend for the length of time needed to sort the property contents and I must not go there without a non molestation protection. Make of this what you will. Financial abuse by court and disrespect of police advice.

MissedTheBoatAgain · 12/11/2018 12:42

To HiddenTruth

Sounds like you have experienced a real bad deal. Have you raised a complaint with the Law Society?

Hiddentruth · 12/11/2018 15:34

Hi MissedTheBoatAgain. ..yes I think bad deal is being kind!

Law Society? Are you meaning them or the SRA...Solicitors Regulation Authority? It is just that they do different things...can you explain your thinking?

There are some complaints currently underway but as anyone knows who has suffered any sort of catastrophe putting pieces back together never results in a perfect repair as the damage has been done.

Damage limitation is what we have to strive for but damage avoidance is not realistic. Compensation is essential where the professionals and the courts and judiciary have messed up. Had I not sat in another court alongside a vulnerable relative who had been made lighter of their savings by cowboy traders and on whom the police had enough to prosecute...and seen the judge not even come out to hear the case I may not have believed my experiences could even be possible.

KataraJean · 12/11/2018 19:46

The whole premise of these loans is scandalous, if I understand correctly. Essentially loan companies have stepped into the gap provided by lack of legal aid but the loans are secured against the marital assets. The solicitor who refers a client to one of these companies for funding has no incentive to solve the case quickly or amicably but rather to rack up court costs because they know the value of the loan (marital assets) - whilst blaming the parties for having their emotions running high. The interest rate on such loans is high. Investors are sold these loans because the rate of return is so high (which means people are being exploited).

This is on top of the fact that if parties cannot settle amicably, and proceedings head to litigation, there is usually some form of abuse present. And police and child protection agencies will tell you blithely to let ex take it to court and you are protecting your child by doing so, because the court will rule on contact (and they don’t have to do anything). And who pays for that?

I hope you get some redress in this situation, I am so sorry you are in this position Flowers

Hiddentruth · 12/11/2018 21:31

Pretty much spot on KataraJean. ..well summarised. Just to explain Highlandheath started this post and has fallen foul of the problems with these litigation loan terms and dynamics with the way they operate with solicitors in tandem...it is 3 way with the loan holder and even more ha gers on if there are investors behind the loans. 3 was always a crowd!

Hiddentruth...myself...has suffered from a different perspective being the Party who did not have the loan and to whom it was not revealed thus infecting my entire case...40k spent defending utter nonsense with no explanation for the chaos and loan and behold good old detective work revealed why,..an absolute disgrace with fat cats getting rich and breaching my human rights.

So stay away from these...the regulators are being pressed to step up, own up and sort out the mess which causes unprecedented additional financial harm and worry and distress and seeks to interefere with and undermine the whole concept of ownership...never more vital than when dividing up lives.

Personally I say it is utterly violating and must stop. So making some noise !

Hiddentruth · 12/11/2018 21:59

Btw thank you to MissedTheBoatAgain for this....

www.forbessolicitors.co.uk/news/display/23219/as-divorce-costs-spiral-out-of-control-fixed-fee-lawyers-become-the-sensible-choice

It is all professional and financial abuse. There is no dressing it up or sweetening what is going on.

MissedTheBoatAgain · 13/11/2018 00:30

To HiddenTruth.

I think my ex was fleeced too. She was charged way more than me for the Final Hearing £8K compared to my £2K even though Solicitor presented the same proposal that had been made at FDR 5 months earlier which they had previously charged for.

Judge at FDR dropped a clanger by saying Joint Lives Spousal Maintenance. Later research of my own revealed that FDR Judge and Ex's Barrister worked in the same building. Did the Ex's Barrister have a word with the Judge beforehand knowing well that I would never agree to a Lifetime of maintenance? Impossible to know or prove.

As English was not her native language sometimes wonder if she understood what she was being told.

My solicitor appeared genuine on the surface and warned me in the early days that as soon as Ex's solicitors had read my Form E and saw how much liquid cash was available they would want Ex to go all the way to a Final Hearing to maximize their fees. However, it was also for the benefit of my Solicitors for the other side to take it all the way as they earned more fees too. Both my solicitor and Ex's solicitor were well known to each other and offices were close by.

Did they both collude to prolong the Divorce process? Impossible to know or prove. Hence my advice to everyone who is going through a Divorce is to settle amicably.