Sears Tooth Agreement – Funding your Case
Under the current legal framework, the question of how to pay the legal fees for your divorce case can be a source of real anxiety. You may even be questioning whether you can afford representation. A number of legal bodies, courts, solicitors and banks have come up with alternative payment options in order to help financially vulnerable clients receive financial support in divorce cases. One such example is the Sears Tooth Agreement.
It is of paramount importance that you discuss the issue of payments and the cost of your case with your solicitor from the outset. In divorce disputes, the general rule is that each side must pay for their own cost. In most cases the richer party is under no obligation to pay for the other’s legal expenses.
Divorce solicitors generally charge by the hour, as it is illegal for your solicitor to offer a “no win no fee” or “percentage of the value of the case the end of the case” charging system.
This means your legal costs can quickly mount up.
It is also highly unlikely that you will be able to access public funding for marital proceedings. As of April 1st 2013, significant changes to civil legal aid in England and Wales drastically reduced the availability of public funds for those unable to pay legal fees. Family Law was deeply affected with almost all forms, including divorce settlements, removed from the legal aid scheme save for in a few extreme circumstances.
A Sears Tooth Agreement may provide a solution if you are concerned about meeting your legal expenses.
How does a Sears Tooth Agreement work?
The Sears Tooth Agreement offers an alternative to paying for your divorce case and solicitors fees upfront. Instead you and your solicitor create a legal contract guaranteeing your representative a reasonable fee extracted from the divorce settlement.
The solicitor will fund your case and in exchange you, the client, assign part of the settlement to the solicitor to cover your legal costs.
At the end of your case, the solicitor can immediately take payment from any financial provisions acquired through the settlement with the exception of any periodical payments, e.g. spousal maintenance orders, which they cannot access.
Not all solicitors will offer or accept a Sears Tooth Agreement and, even if yours will, it is only necessary in certain cases. Before deciding whether or not to enter into such an agreement, it is important to look at all the options available to you.
When and why you should consider a Sears Tooth Agreement:
A Sears Tooth Agreement should only be considered if you are unable to fund your case, you expect to successfully win a reasonably large settlement, your solicitor agrees to it, and you have considered all other options.
In essence, a Sears Tooth Agreement is similar to a credit agreement. The Solicitor is extending a line of credit to you which must be repaid in full as soon as the case is over.
The agreement poses a risk to the solicitor, particularly if there is doubt over the success of your case, resulting in many solicitors refusing to enter into one. You, the client, should also exercise caution and ensure that your expected settlement is enough to cover both the legal costs and your needs post case.
When evaluating whether to take out a Sears Tooth Agreements you should take into account a number of factors including:
- Complexity and expected duration of the case
- What assets are available and likely to be won
- Whether assets likely to be attained are liquid or easily realisable
In addition to the Sears Tooth Agreement, alternatives options for funding your legal expenses should be considered. These include:
- Legal Aid: Despite the demise of public funding for most marital disputes, free legal aid is still available in some extreme cases such as domestic abuse. Access to public funds is only possible in specific circumstances and if you think you should qualify seek legal advice immediately.
- Maintenance Pending Suit Order: If you substantially depend on the other party for financial support, you and your representative can take your case to the courts who may order the other party to pay maintenance until the case has been settled.
- Legal Services order: Much like the Maintenance Pending Suit Order, in some cases you can take your case to the courts and secure an order requiring the other party to pay your legal fees.
- Bank loans: Another option is to speak with your bank and look into taking out a loan to cover legal costs and pay your solicitor during the case. Depending on your bank and the agreement, you could combine the loan to cover your costs with an irrevocable undertaking to be repaid by the settlement (much like in the Sears Tooth Agreement). Some banks may also offer to postpone interest payments until the final payment, meaning you won’t have to pay anything until the case is over. These arrangements are not usual procedure and will depend on your bank.
- Litigation Lenders: There are specialised lenders who are able to loan you the money to pay for your legal costs in exchange for repayment via the settlement. These lenders have strict criteria, requiring virtual certainty that you will win your case, including a sizeable settlement amount, and need the loan purely to get through the case.
- Represent yourself: though not advised, it is possible to litigant in person and represent yourself in the courts to avoid paying a solicitor. This is not a recommended route as it harms your prospects of a successful solution.
A Sears Tooth Agreement negates the need to borrow from friends and family, or take out a loan from a bank which would incur interest. It avoids applying for court orders, either maintenance pending suits or legal services, or offers a backup should your application for a court order fail. Given that you are strongly advised to use a legal representative during your case, a Sears Tooth Agreement is sometimes the best option for someone struggling to pay solicitors fees.
How to set up a Sears Tooth Agreement
The first step in taking on a Sears Tooth Agreement is to talk to your solicitor and confirm whether they are happy to take on the responsibility. You will need to confirm an estimated cost for the case, taking into account the probability you will win the case and predicted settlement amount. Unless your success is highly likely and your expected settlement both large and either liquid or easily realisable, your solicitor is unlikely to agree to take on the agreement. As the client, you should be wary of entering into a Sears Tooth Agreement with your solicitor, even if they advise it, if your case seems weak.
Once you have agreed the costs and terms of the agreement with your solicitor, you will need to draft a “Deed of Retainer and Assignment” outlining the deed. This must then bet be signed by an independent advisor, a legal representative unattached to your original solicitor, before being submitted to the courts. Once accepted by the courts is becomes a legally binding contract.
A Sears Tooth Agreement can offer a reliable financial solution to funding divorce cases in instances where one party cannot afford legal representation. However, it is just one of a number of possible routes and is itself dependant on individual circumstances. Before entering into any kind of legal contract with your solicitor it is best to seek independent legal advice to ensure you choose the best solution for your litigation needs.