A recent Family Court judgment provides important guidance on the court’s approach to Legal Services Payment Orders (LSPOs), particularly where an application seeks to extend funding to historical costs incurred beyond a previously approved budget. In this article, partner Adrian Clossick and trainee solicitor Iola Reynolds from Stewarts’ Divorce and Family department examine the decision in DR v ES & Ors (Further LSPO Application) [2026] EWFC 15 and consider its practical implications for LSPO applications.
Background
The parties, DR (the wife) and ER (the husband), married in 2008 and separated in early 2021. Financial remedy proceedings were issued in September 2021 and were heavily contested throughout. The parties have two children, and separate proceedings under the Children Act 1989 have concluded.
The matrimonial assets comprised interests in two property holding companies: Y Ltd and the husband’s one‑third shareholding in X Ltd, which he owned alongside his parents. The total matrimonial assets were valued at £18,008,203, with the judge concluding that the husband held net assets of £18,303,150.
During the financial remedy and children proceedings, the wife was awarded three LSPOs totalling more than £1.7m to enable her to meet her legal fees.
The matter was listed for a pre‑trial review on 26 March 2026, with a seven‑day final hearing due to commence on 5 May 2026. The wife applied for a further LSPO of approximately £720,00, comprising outstanding legal costs and estimated future costs to the conclusion of the final hearing. The wife’s solicitors made clear that they would not continue to act unless the outstanding fees were paid, citing in particular the history of the litigation and the husband’s conduct.
The husband accepted that further funding might be appropriate in principle but argued that the previous LSPO imposed a clear costs budget, which the wife’s solicitors had exceeded at their own risk.
Key issues
The court was required to determine whether a further LSPO should be made, including whether this should encompass historical costs already incurred, and the appropriate mechanism for payment of any additional funding.
The judge’s decision
Mr Justice MacDonald ordered a further LSPO in the sum of £560,120, comprising £154,570 for costs already incurred and £405,550 for the wife’s future costs to the final hearing.
The court accepted that partial funding of historical costs was justified where there was clear evidence that the wife’s solicitors would cease acting without payment, particularly as the husband continued to fund his own legal team, including through borrowing. To leave the wife without representation in those circumstances would undermine the principle of equality of arms. However, the court emphasised that an LSPO does not permit unrestricted expenditure, and only part of the overspend beyond the previous budget was allowed.
In assessing future costs, the court took into account the scale of work required to take matters to a final hearing, including ongoing disclosure difficulties, the absence of any open offer following the July 2025 determination and findings of obstructive conduct by the husband’s parents.
The court also approved a payment regime requiring the husband to discharge the LSPO by instalments, with restrictions on payments to his own advisers. This was necessary to preserve an equality of arms, given the husband’s control over the available funding.
Conclusion
This decision highlights the court’s approach to LSPOs in complex financial remedy proceedings. While court‑approved costs budgets should be adhered to, this decision demonstrates that they will not be applied rigidly where doing so would undermine fairness or the principle of equality of arms. In appropriate cases, LSPO funding may be extended, including to meet historical costs to ensure that a financially weaker party can litigate effectively on an equal footing.
Partner Adrian Clossick says:
“This case adds to the ever-growing body of case law around the making of LSPOs in contentious family law proceedings. Once again, the courts have emphasised the importance of ensuring equality of arms in litigation. It is also important to note that this can extend to ensuring that the financially stronger paying party does not pay their own lawyers more than has been ordered to be paid to the financially weaker receiving party. This is an interesting development that will no doubt be a feature of future cases.”
