Push for legal fees cap in divorce cases

Federal MPs and senators are pushing for a cap on legal fees in divorce property settlements after being told of cases where lawyers costs were more than the value of the ­assets in disputes.

Kevin Andrews is the chair of a joint parliamentary committee on the family law system. Picture: NCA NewsWire/ David Crosling

Federal MPs and senators are pushing hard for a national cap of $50,000 on legal fees in divorce property settlements after being told of cases where lawyers costs were more than the value of the ­assets in family law court disputes.

In one recent settlement, the fees were more than $500,000 but the value of the assets in the dispute was only $200,000. Another case involved legal fees of between $800,000 and $900,000 and the assets were just over $1m.

There are also moves to introduce “proportionality” in family law fees after family court judges complained of “obscenely high” legal costs damaging the emotional, social and financial well being of parents and their children.

The joint parliamentary committee on the family law system is also expected to recommend a big staffing boost of extra registrars for the Federal Circuit and Family Court in an attempt to cut excessive delays, enforce court orders and speed up resolution of family violence allegations.

The committee has looked at stopping the practice of “disappointment fees” where barristers can be paid when a case is settled and they don’t have to appear in court. The fees can run to more than $10,000.

Apart from the wish to put a $50,000 cap on family law court legal fees the committee members have also looked at a cap of 10 per cent of the value of the assets in dispute.

For more than a year the committee, expected to deliver its ­report containing about 29 recommendations on Monday, has been swamped with complaints about delays, excessive legal costs, inability to enforce court orders and interminable delays in resolving family ­violence allegations. The inquiry also heard that many lower-level judges were handling more than 300 cases at a time, and some as many as 600 cases. The committee, with representatives of all parties, has been reviewing the Family Law Act ­almost 50 years since it was introduced in 1975.

Family law reform lobby group For Kids Sake chief executive David Curl said there had been ­almost 70 reports in that time, and he expected this report would be yet another missed opportunity.

He said “tinkering” with the family law system did not work, because it was unsuited for dealing with family breakdown.

“Family law is not broken; it’s unfit for purpose and harmful ­because it’s intrinsically slow and unaffordable and frightening and adversarial,” he said.

A transformation was needed, he said — “from too-late, reactive, financially unsustainable systems to safer, more cost-effective early interventions and education for children and families”.

Last year committee chairman Kevin Andrews told The Australian: “The high cost of legal fees in family law matters has been raised with the committee in hundreds of submissions.

“There is a widespread belief among parties to family law proceedings that their costs have compounded as cases are unnecessarily prolonged.”

The parliamentary committee is expected to recommend more funding for Legal Aid, proper training for family report writers and better training in domestic violence. The committee members had strongly diverging views on the family law system.

It is understood not all committee members agreed with capping costs and banning “disappointment fees”.