The first question that family law practice director Alicia Elliott asks her new clients is: “What brings you here to see a divorce lawyer?”
“It’s not where people want to be, no one goes into marriage thinking they’re going to get divorced,” Elliott from boutique family law firm Broun Abrahams Burreket says. The divorce rate in Australia is 2.2 divorces per 1,000 residents as of 2022, according to the Australian Institute of Family Studies, and Elliott says no one divorce case is the same.
Divorces in Australia can cost anywhere between $300 and $100,000 – although Elliott says she’s witnessed costs surge beyond this.
And in this economic climate, it’s women who will be hit the hardest when they are faced with a divorce, as it widens the already existing gender pay gap. A study from 2022 found women experience a decline in income as large as 50 per cent after a divorce, while the income of men suffered minimal, if any, loss. It’s even worse for our most vulnerable women, including women experiencing domestic violence.
Speaking with Women’s Agenda, Elliott, who has more than 15 years’ experience in family law, discusses the challenges of divorce, including the financial burden of the legal process, and how legal loans can lighten the load.
Option 1: Mediation
There are three main processes to resolve the issues that arise from separation and divorce, including the divorce itself, property settlement and arrangements for children, if there are children involved. The minimum cost of the divorce itself – that is, applying for a divorce and having it considered by the Court – is $350, but can cost up to $1060, plus legal costs.
While property settlement and parenting arrangements can be settled through other legal pathways, Elliott says going to court will often skyrocket the total cost of divorce.
“If you can stay out of court, often that means your costs are lower because once you’re in court, the decision making is out of your control,” Elliott says.
One option to work out property settlement and arrangements for children is through mediation.
“More than half of my matters now would be resolved at mediation,” Elliott says.
“In both property and parenting matters, you have to try and mediate first before you go to court. The court rules require you to do that, unless it’s urgent or you fall within another exception.”
Mediation can cost from $4,000 to $30,000, depending on each case. It involves the parties involved in the divorce, their lawyers and a mediator, often a retired judge or counsellor.
“You sit down and you try and resolve your dispute by talking about it, going back and forth, putting various positions and hopefully moving closer together and meeting somewhere in the middle,” Elliott explains.
Option 2: Collaborative Practice
Another option Elliott offers her clients is collaborative practice.
“Collaboration is slightly different to mediation… it’s very much led by the clients and how quickly they want to move things along,” she explains.
In the room are the parties, their lawyers and a “collaborative coach”, who all sign an agreement before commencing proceedings which says in part that if the collaboration fails, the parties must get new lawyers.
“Part of the idea is that everyone’s very motivated, including the parties and their lawyers, to resolve the dispute during the collaborative process rather than going to Court,” Elliott says.
Option 3: Litigation
If parties can’t resolve their dispute out of Court, another option is litigation, which means going to court. Elliott says this is often the most expensive pathway.
“You have to pay court fees, but also lawyers have to go to court to appear for you on each occasion,” she says.
Cases can have several court days, and while the court usually says the final hearing for the case will be within a year of commencing proceedings, Elliott says it can be longer than that, which of course means it can raise the costs of the process.
“The reason why costs can build up as much as they do is that, family law, as you would expect, is a very emotional area of law. People sometimes can be running on emotion and that can make them less objective,” Elliott says.
What if I can’t afford my divorce?
A report from The Separation Guide this year found nearly half (46.6 per cent) of couples doing through divorce attempted to file divorce without any legal advice, highlighting just how much the financial burden of divorce weighs on people in Australia.
A divorce with no legal advice can be detrimental to women, particularly women in dangerous situations, like cases of family and domestic violence. According to a survey from Australian Family Lawyers this year, lawyers cited domestic violence, coercive control and abuse as the top reason for divorce.
“There are a lot of women in really difficult situations, whatever kind of violence it might be, and financial abuse is obviously very real and present,” Elliott says.
“They might not feel like they have any access to funds to be able to leave a really difficult situation.”
Just seven years ago, there were no options for couples to access a legal loan for their divorce. Plenti was the first organisation to offer this option. Now, the organisation has partnered with more than 620 family law firms across Australia.
As the Head of Legal Finance, Rose Dravitzki oversees lending from Plenti, who are committed to assisting people throughout the process of a divorce, and often women are are impacted the most.
“We work with family lawyers very closely,” she says.
“We partner with them and they essentially let us know when their clients might need some assistance with funding their matter so they can achieve a fair outcome for their families.”
For the last seven years, Plenti has been providing loans to people who are struggling to afford their divorce, and this can be for several different circumstances.
“Sometimes the other side – often the husband, but not always – might have the greater income,” Dravitzki explains.
“Sometimes people can be working too, but they just don’t have enough. With current price pressures, as well as inflation… people are struggling to meet their current bills.
“So a divorce on top… that’s a lot.”
Like Elliott, Dravitzki notes how the emotional aspects of divorce can increase costs.
“It’s hard for some people to take a step back and say, ‘maybe we can work this out in a more amicable way and it will cost less’,” Dravitzki says.
To address this issue, Plenti offers legal loans to people going through divorce and struggling with the costs associated with the process. Lawyers can either refer clients to Plenti, or people seeking a loan can go to Plenti’s website themselves and apply there.
As the only company offering legal loans to people going through divorce to carry a credit licence, Dravitzki said the loans ease the financial pressures of what is a “highly emotionally charged” situation.
In navigating the complex terrain of divorce, legal finance solutions like those provided by Plenti offer a lifeline to individuals grappling with the emotional and financial burdens of this highly challenging chapter of life.
You can find out more about Plenti’s legal fee loans here.