Finality and Funding: a Further Thought on CC v UU Concerning the Availability of LSPOs for Enforcement Proceedings

We hope the readership can stomach a second blog on CC v UU, concerning post-final order LSPOs. Our first blog set out the relevant facts, Peel J’s reasoning and conclusions, and our concerns about the potential impact on vulnerable litigants. We also suggested that there had been room for an alternative approach. Further consideration has led us to wonder whether Peel J in fact fell into error, and the judgment not only could have been decided differently but should have been.

The judgment rests on the interpretation of references to ‘proceedings’ in s 22ZA MCA 1973. The first two parts of the section read as follows (with emphasis added):

(1) In proceedings for divorce, nullity of marriage or judicial separation, the court may make an order or orders requiring one party to the marriage to pay to the other (‘the applicant’) an amount for the purpose of enabling the applicant to obtain legal services for the purposes of the proceedings.
 
(2) The court may also make such an order or orders in proceedings under this Part for financial relief in connection with proceedings for divorce, nullity of marriage or judicial separation.’

The crux of the judgment is as follows:

‘a party to divorce proceedings may apply for a LSPO under s22ZA unless and until he or she is prohibited from doing so by the imposition of a clean break. If a final order has been made, claims have been dismissed, and the proceedings have ended, in my judgment it cannot be that a party may thereafter invoke s22ZA for an ancillary purpose such as to pursue an appeal, or to seek enforcement, or to set aside.’

In the case before him, a final order imposing a clean break had come into effect 18 months earlier. On Peel J’s reasoning, there were therefore no longer any proceedings under Part II MCA 1973, and therefore no proceedings in which an LSPO order could be made.

One part of the legislation which was not considered by Peel J when interpreting ‘in proceedings under this Part’ is the definition of ‘legal services’ at s 22ZA(10):

‘(10) In this section ‘legal services’, in relation to proceedings, means the following types of services—
 
(a) providing advice as to how the law applies in the particular circumstances,
 
(b) providing advice and assistance in relation to the proceedings,
 
(c) providing other advice and assistance in relation to the settlement or other resolution of the dispute that is the subject of the proceedings, and
 
(d) providing advice and assistance in relation to the enforcement of decisions in the proceedings or as part of the settlement or resolution of the dispute,
 
and they include, in particular, advice and assistance in the form of representation and any form of dispute resolution, including mediation.’

Whilst the words ‘legal services’ do not appear in s 22ZA(2), the words ‘such an order’ can only refer to the orders described in the previous sub-section, i.e. an order enabling the applicant to obtain ‘legal services’. Plainly, it was anticipated that LSPOs would be available to litigants in enforcement proceedings. Peel J’s approach therefore seems inconsistent with s 22ZA(10)(d) (as well as being difficult to justify from a logical standpoint).

More broadly, s 22ZA(10)(b) refers to advice and assistance ‘in relation to the proceedings’, not simply ‘in the proceedings’. Under an ordinary understanding of the words an appeal, set aside or enforcement application relate to the proceedings in which the subject order was made. Section 22ZA(10)(b) indicates the circumstances in which Parliament envisaged that orders may be made and so should inform interpretation of the provision.

It is also worth noting that the meaning of the word ‘proceedings’ had been considered by the Supreme Court. Plevin v Paragon Personal Finance Limited [2017] UKSC 23 also related to litigation funding, in the context of transitional provisions relating to ATE insurance premiums. Lord Sumption held:

‘It is clear that for some purposes the trial and successive appeals do constitute distinct proceedings … However, ‘proceedings’ is not a defined term in the legislation, nor is it a term of art under the general law. Its meaning must depend on its statutory context and on the underlying purpose of the provision in which it appears, so far as that can be discerned.’

Considering the legislation before him, Lord Sumption held that its ‘purpose would be defeated by a rigid distinction between different stages of the same litigation’.

The purpose of LSPOs is to provide a mechanism for without resources to obtain access to justice. If a party can obtain an LSPO to cover the costs of an application but not to bring or defend an appeal, to enforce their award, or to challenge it after discovering some apparent fraud or non-disclosure, the purpose of the LSPO regime is arguably undermined.

In respect of set aside applications Peel J provided an additional reason why an LSPO should not be available, even if there were ongoing proceedings. He set out

‘Further, in my judgment a set aside application does not fall within the definition of an order “in proceedings under this Part for financial relief”. A set aside application is not made under Part II of the 1973 Act. It is, rather, an application under section 31 F(6) of the Matrimonial and Family Proceedings Act 1984 and FPR 2010 9.9A. It is not an application for financial remedies, or intimately connected with the financial remedies proceedings. The definitions of “financial order” and “financial remedy” at FPR 2010 r2.3 do not include a set aside application. It is an application to set aside an order made on a financial remedies application so that a renewed application for financial relief can be made. A set aside application is not supplemental to, or ancillary to, or consequential upon, a financial remedies order. It is, in my view, a specific statutory power to set aside contained under s31F(6), which encompasses all aspects of family law and is not unique to financial remedies. I am not persuaded that because the set aside application relates to a concluded financial relief application, it becomes part of those financial relief proceedings, some 19 months later.’

For our part, we find it difficult to see that an application to set aside an order made in proceedings is not intimately connected to those proceedings. However, even if Peel J was right and the language of the statute precludes LSPO applications for set aside applications, could such funding applications not be dealt with under the common law, as in Schedule 1 proceedings? MacDonald J in YM v NM (Maintenance Pending Suit) [2020] EWFC 13 took the view that maintenance pending suit could be ordered in a set aside application where the applicant could demonstrate that they were likely to succeed in their application; a similar approach could be taken to legal funding (which of course originated as a form of MPS).

The availability of LSPOs for appeals, enforcement, and set aside application is complex and important and requires further analysis. It is to be hoped that further opportunities for judicial consideration will arise, allowing for a comprehensive analysis of the statutory framework and its intended purpose.