Co-operative Legal Services have just announced that they are offering a divorce for £99 plus VAT. But, is it as good a deal as it first appears?
Fixed fees for divorces are nothing new. Many solicitors already offer a fixed fee; I pioneered them in Colchester. Armstrong Family Law charges £1,000 including VAT and disbursements for a straightforward undefended divorce when acting for a Petitioner or £550 including VAT when acting for a Respondent.
I am sure that this may look very attractive to some people, who are probably experiencing acute financial discomfort as the result of a separation and who are worried about their financial position after the divorce.
How come a solicitor charges more? You need to ask yourself the following questions:
1. Ask yourself – who will be handling my divorce?
Firstly, you need to bear in mind that the Co-op is trying to tap into a market that will appear in 2013 when legal aid stops being available in most divorce cases (unless there have been domestic violence injunction proceedings). They are hoping to corner the market in providing divorces for people on low incomes who otherwise will be faced with the unattractive prospect of representing themselves in their divorce.
A fixed fee of only £99 plus VAT is very low. It’s even lower than the fee that a solicitor receives for acting in a legal aid divorce. When you consider that more and more firms have been giving up legal aid as they find it very difficult to make even a modest profit on such work, you have to ask yourself how will the Co-op and other low cost providers break even? The answer is that that they will use the same strategy that successful legal aid law firms have used for years; they will employ very junior and often unqualified and inexperienced staff who will handle the work, supervised by a small number of more experienced solicitors. Their website refers to the work being checked by an “experienced specialist lawyer”.
“Lawyer” can of course mean a great many things. It can mean a solicitor. It can also mean a completely unqualified paralegal, perhaps with some experience. I note that they are very careful to use the word “lawyer” and not “solicitor”. It is difficult not to draw the obvious conclusion that their staff may often have no legal qualifications at all. And just how experienced is “experienced”? Even if you get a Co-op solicitor acting for you, there’s no guarantee that they have much experience.
So who would you prefer to handle your divorce? A cheap unqualified “lawyer” or junior solicitor or an experienced and qualified solicitor who is a Resolution accredited family specialist.
2. Ask yourself – is it really just £99 plus VAT?
No, it isn’t in most cases. In addition to the £99 plus VAT fee that you pay the Co-op, you will also have to pay court fee of £340 when you issue the divorce petition and a further £45 when you apply for the Decree Absolute, unless you are on a low income and qualify for a fee exemption. To be fair to the Co-op, their website makes this clear, but the press coverage has of course inevitably focused on the magic figure of £99. The actual cost for most people will be £503.80.
3. Ask yourself – what else do you get for the money?
The answer is not much. Yes, £503.80 is still lower than £1,000, but I do much more than just process papers. For my fixed fee, you also get:
(a) An initial consultation worth £100 during which I advise you about the divorce and also give preliminary advice in relation to financial and children issues. If you want the Co-op to do this, they charge £298.80 including VAT, which increases their fixed fee to £683.80.)
(b) You may be entitled to claim costs from the other side, or costs may be claimed against you. I will negotiate the issue of divorce costs with the other side. The Co-op fee of £99 plus VAT is too low to include this.
(c) I will prepare the draft divorce petition and submit it to the other side for their consideration before it is issued. This approach is in line with the Resolution Code of Practice and Guides to Good Practice and helps keep acrimony to a minimum, which will help you and your ex reach an agreement about other issues. The Co-op fee of £99 plus VAT is again far too low to include this.
(d) If you want the Co-op to actually draft and check the divorce paperwork for you, it doesn’t cost £99 plus VAT. In fact, it would cost you £149 plus VAT and court fees, i.e. a total of £563.80 just to get them to check your own drafting. If you want the Co-op to draft the papers, then that is what the Co-op call a “managed divorce” and will cost you a grand total of £955 including court fees and VAT if you are the Petitioner or £360 if you are the Respondent.
I charge Petitioners a fixed fee of £1,000 including VAT and court fees for a divorce; that can be broken down as follows:
Solicitor’s fee – Initial consultation 83.33
Solicitor’s fee – Handling the divorce 429.17
VAT 102.50
Court fees 385.00
Total 1,000.00
It’s a little bit more than the Co-op’s managed fee of £955, but you do get an experienced accredited specialist solicitor acting for you.
Furthermore, dealing with the divorce only scratches the surface. The hard part involves sorting out the finances. How will the assets, including the house and pensions be divided between you? How much maintenance should you seek or expect to pay? The Co-op does offer advice and representation in relation to financial issues, but again, how experienced will their “lawyer” be? Can they offer collaborative law?
There will always be people for whom cost is the most significant factor when they consider which option they should use. But, if your priority is to ensure that you get the right outcome for you and your family, then a low cost divorce provider may well be a very false economy.
(The information in this blog is accurate as at 23 September 2012).