1. Court orders for legal fees: lump sum and dollar for dollar orders
The starting point is that each party pays their own legal costs. The Court can depart from that rule only where it considers the circumstances justify doing so. It is important to note that they are also expensive applications to run, and you may have to spend upwards of $15,000 just to get the Court to make an order.
In certain circumstances, the Court can order that one party pays for the other’s legal fees until the proceedings are finalised, or contributes a certain amount. The Court can also order that certain assets are sold or that a pot of money is applied from the pool to fund one or both of the parties’ legal fees.
A litigation funding order can be sought as a costs order, as an interim or partial property order, or as spousal maintenance.
Where the order is sought to fund ongoing proceedings, the applicant generally needs to show that they cannot meet their own legal costs, that the other party is in a position of relative financial strength and can meet their own costs, and that the applicant has at least an arguable case in terms of final orders sought. There are two main types of order:
- Lump sum orders: the Court orders a fixed amount to be paid towards legal fees, usually from an identified fund such as savings or the proceeds of a property sale. The Court must be able to point to a capital sum or readily realisable property, and the order is for a set amount rather than open-ended.
- Dollar for dollar orders: the wealthier party must pay the other party an amount equal to what they spend on their own legal fees, usually until trial. These orders are often used where that party pays their fees from income rather than from an identifiable fund.
These are expensive applications to run, because you will incur the following legal costs:
- A separate application: an interim application needs its own affidavits, financial evidence and usually a hearing, which adds legal fees and delay before any money is paid.
- Evidence of both parties' finances: you must prove your own inability to pay, the other party's capacity to pay and your likely costs. Where the other party's finances are unclear, that can mean further disclosure requests or a forensic accountant.
- No guarantee of success: the Court may refuse the application, for example if it is not satisfied the other party can afford to pay, leaving you with the cost of having run it.
- Uncertain treatment at trial: money paid under an interim order cannot simply be added back to the pool at trial. The Court is more likely to deal with it through a percentage adjustment, which may make the other party less willing to agree to a funding order by consent.
Dollar for dollar orders are also notoriously difficult to enforce:
- Reliance on the other party: payments are triggered by what the other party spends, so you depend on them disclosing their legal invoices promptly and accurately.
- Disputes over amounts: arguments about which invoices count, when payment falls due and whether the fees are reasonable can lead to further hearings.
- Enforcement is another application: if the other party does not pay, you must apply to enforce the order, spending more money and time to recover funds you were already owed.
- Capacity can change: an order is only as good as the other party's ability and willingness to pay. Income can fall, assets can be moved, and a party intent on delay may pay late or not at all.
- Your fees keep running: while payments are late or in dispute, your own legal costs continue to build and your lawyers may need other arrangements to keep acting.
A litigation funder can work alongside these orders or offer an alternative to them. Funding does not depend on the other party's co-operation or compliance, and it can cover the cost of bringing a litigation funding application where one is worth pursuing.
2. The true cost of selling assets to pay legal fees
Selling shares, an investment property or business interests to fund proceedings can cost far more than the legal bill itself.
- Tax is crystallised: a sale to a third party is a CGT event. The tax payable comes out of the pool, reducing what is left for both parties. Under the 2026 tax reforms, gains made from 1 July 2027 lose the 50% CGT discount and are taxed at a minimum rate of 30%, so the tax on a sale can be significantly higher, even in a low-income year.
- Rollover relief may be lost: marriage breakdown rollover relief can defer CGT where assets are transferred between spouses under a court order or financial agreement. It does not apply when an asset is sold on the open market to raise cash.
- Timing is forced: a sale driven by legal fees may happen at the wrong point in the market, when it otherwise could have been preserved and value maximised.
- Transaction costs add up: brokerage, agent's commission and loan break costs further reduce the net proceeds.
- You are treated as having had the benefit: when the Court looks at each party's current and future circumstances, it will take into account that you have already had the value of the sold asset, which may reduce your share of what is left.
- You must prove the tax: if you want the Court to treat the tax on the sale as a liability when dividing the pool, you will need evidence of it, usually from an accountant, and you will bear the cost of producing that evidence.
Assets kept in the pool keep their value and their options. They can be divided in specie, transferred with rollover relief where available, or sold later on a timetable that suits the receiving party's own tax position.
3. How a litigation funder can help
A litigation funder such as Legal Finance Group can pay approved legal fees and disbursements as your matter progresses, with repayment generally deferred until settlement or final orders. For eligible clients, this can offer:
- Preservation of the asset pool: shares, property and business interests can stay intact until the parties or the Court decide how they should be divided.
- Tax-aware timing: decisions about selling assets can be made on their merits, with advice from your accountant, rather than to meet the next invoice.
- A level playing field: where one party controls the family finances, funding can give the other party access to experienced lawyers, barristers and experts such as valuers and forensic accountants.
- Negotiating strength: a properly funded party is less likely to accept an early, inadequate offer simply because they cannot afford to continue.
- A clear record: a funding facility is a documented liability, which avoids disputes about how and when pool funds were spent. How it is treated in final orders remains a matter for the Court.
4. Is litigation funding right for you?
Funding tends to suit parties who:
- are asset-rich but cash-poor, with wealth tied up in shares, property, trusts or a business
- have a significant property pool, where a forced early sale would carry a material tax cost
- have limited access to family funds because the other party controls them
- expect proceedings to run for many months, or through to a final hearing
Funding is a financial commitment. Fees and interest apply, and it should be weighed against other options. Your lawyer can help you compare them.
Talk to us
Legal Finance Group works alongside your family lawyer to fund approved legal costs while your matter is resolved. Contact our team to discuss whether funding may suit your circumstances.
This article is general information only and does not take into account your personal circumstances. It is not legal, tax or financial advice, and you should obtain advice specific to your situation before acting. Any funding is subject to assessment and approval. Information is current as at September 2026.