Navigating Ethical and Financial Challenges in Family Law: The Case for Litigation Funding

In family law, the “pay on end” model—where legal fees are deferred until the case concludes—presents both ethical dilemmas and financial challenges. While this arrangement aims to make legal services accessible, it can lead to significant cash flow issues for law firms and may inadvertently affect the quality of representation and create ethical issues.

As an alternative, litigation funding, exemplified by services like JustFund (URL), offers a sustainable solution that benefits both clients and legal practitioners.

The Ethical Conundrum of “Pay on End”

Deferring legal fees until the end of a case can create several ethical and practical issues:

1.     Cash Flow Strain: Law firms will likely experience financial pressure, potentially compromising their ability to allocate adequate resources to a case when there are significant fees outstanding across the firm for multiple matters, causing lawyers to be swayed to assert their clients to settle in situations where they would likely be less forceful if they did not have cash flow issues associated with the matter.

2.     Quality of Representation: Financial constraints are likely limit a firm’s capacity to engage necessary experts or dedicate sufficient time, potentially affecting case outcomes. For example, many firms are unable to carry Counsels Fees, expert evidence fees or other associated proceedings costs, as they creates a significant cash flow issue for the firm

3.     Client-Lawyer Relationship: The accumulation of fees can lead to disputes, especially if clients are unprepared for the total costs at the conclusion of their case, and are unwilling to pay interest accruing as well as any additional fees or loadings added by the firm at the conclusion of the matter.

4.     Securing costs: many pay one end firms will secure their costs by way of caveat or a lein over client property, creating ethical dilemmas for both the firm and the client.

Litigation Funding: A Forward-Thinking Solution

Litigation funding involves a third party covering legal fees upfront, to be repaid from the settlement or judgment. In family law, this model offers several advantages:

1.     Financial Accessibility: Clients can pursue their legal rights without the burden of immediate legal fees, ensuring equitable access to justice.

2.     Law Firm Stability: Firms receive timely payments, maintaining healthy cash flow and enabling them to provide high-quality representation without financial strain or ethical conundrum.

3.     Ethical Integrity: With financial concerns alleviated, lawyers can focus entirely on their clients’ best interests, upholding ethical standards without compromise.

JustFund: Pioneering Litigation Funding in Family Law

JustFund is Australia’s first dedicated family law finance provider, offering flexible lines of credit to individuals undergoing separation. Their services include:

·      Direct Payment to Law Firms: Ensuring that legal fees and disbursements are covered promptly, supporting law firms’ financial health.

·      Client-Centric Terms: Clients repay the funds from their property settlement, with no out-of-pocket expenses until the case concludes, reducing financial stress during emotionally challenging times.

·      Streamlined Process: JustFund collaborates directly with legal practitioners to expedite funding, allowing clients and lawyers to focus on achieving favourable outcomes.

While the “pay on end” model seeks to make legal services more accessible, it introduces ethical and financial challenges that can impact both clients and law firms.

Litigation funding, as offered by JustFund, presents a viable alternative that addresses these concerns, promoting financial stability, ethical integrity, and access to justice in family law proceedings.

Would you like to learn more and see how JustFund can assist with Clients, Costs and Security? Join us for our free webinar on 23 July 2025 where Family Law Education Network and Justfund discuss all things costs, cost agreements, cost estimates and securing funding. Simply click here to register.