Legal Services Payment Orders in Focus: Contrasting HA v EN and SM v BA
Recent High Court decisions in HA v EN [2025] EWHC 48 (Fam) and SM v BA [2025] EWFC 7 have shed light on how the courts are currently approaching Legal Services Payment Orders (LSPOs) under sections 22ZA and 22ZB of the Matrimonial Causes Act 1973 (“MCA 1973”). Both cases involved high-value financial remedy proceedings where wives applied for interim maintenance and sought funding of their historical and ongoing legal costs.
This article focuses on the LSPO elements of these cases, the legal debate surrounding historical costs, and the practical implications for family law practitioners and divorcing spouses.
An LSPO is an order directing one spouse to pay the other’s legal costs in ongoing divorce proceedings. It is designed to ensure equality of arms where one party has control of financial resources and the other cannot otherwise secure legal representation.
Under s.22ZA MCA 1973, the court may make an order if it is satisfied that without it, the applicant would not reasonably be able to obtain appropriate legal services for the purposes of the proceedings.
When considering an application, the court must assess factors under s.22ZB MCA 1973, including:
- The financial resources of each party now and in the foreseeable future.
- Whether the applicant can reasonably secure legal services through other means (e.g., litigation loans, a Sears Tooth agreement, or legal aid).
- The subject matter of the proceedings and the reasonableness of the costs.
What is a Legal Services Payment Order?
Guidance was set out in Rubin v Rubin [2014] EWHC 611 (Fam): LSPOs should not be used to retrospectively cover costs of concluded proceedings, but historical costs within ongoing proceedings may be funded if necessary to allow future representation.
The Debate on Historical Costs
A current point of legal tension concerns whether historical legal fees incurred during ongoing proceedings should:
- Be paid in full,
- Be discounted (as they would be on a costs order assessed on the standard basis in civil proceedings), or
- Not be paid at all.
This debate has given rise to two different approaches:
- The “Cobb approach”: Rooted in decisions by Mr Justice Cobb, this line of authority applies a percentage discount (often around 30%) to reflect the reduction typically applied on standard basis costs assessments.
- The full recovery approach: As applied by Nicholas Allen KC in SM v BA, this view holds that LSPOs are not Costs Orders under Part 44 CPR, so deductions for proportionality are not required.
The two recent cases illustrate this divergence.
HA v EN [2025] EWHC 48 (Fam)
Background
- The parties married in 2009 with a pre-nuptial agreement, which capped the wife’s entitlement at 50% of assets.
- At the time, the husband disclosed assets of approx. £61m. The wife later alleged his financial disclosure was misleading and inconsistent.
- A failed settlement hearing in March 2024 left the wife facing significant legal costs.
The wife had tried and failed to secure litigation funding through commercial loans and was refused a Sears Tooth arrangement. She therefore applied for an LSPO of £450,000, including £90,000 for historic costs.
Her outstanding bills included:
- £75,776 owed to former solicitors, Starck Uberoi (whose file was under lien).
- £97,290 owed to current solicitors, Harbottle & Lewis.
- £36,613 work in progress (excluding VAT).
In addition, she sought £837,270 for future litigation costs up to final hearing.
The Court’s Decision
The judge acknowledged:
- The wife could not secure alternative funding.
- Legal aid was not available.
- The parties had “considerable unrealised resources.”
The court found she could not reasonably secure representation without an LSPO.
However, the judge was unimpressed by Harbottle & Lewis’s insistence that Starck Uberoi must first be paid before access to papers was granted, calling this “an unimpressive excuse.”
Applying the Cobb approach, the judge made the following orders:
- £89,596 in claimed historic costs, subject to a 30% discount → recoverable at 70%.
- £610,000 towards future costs.
- Payments to be staged and secured by charging orders.
In total, the husband was directed to pay £626,585 by way of LSPO.
The case confirmed that while LSPOs can cover historic costs, they may be discounted to reflect the proportionality safeguards of civil costs assessments.
SM v BA [2025] EWFC 7
Issues
The wife in this case applied for an LSPO of £1,121,467, broken down as follows:
- £240,000 unpaid invoices.
- £650,000 future costs up to a private financial dispute resolution hearing.
- £47,000 for her interim maintenance application.
- £182,000 relating to prior Family Law Act proceedings.
Like in HA v EN, she had been refused litigation loans. Her solicitors declined a Sears Tooth arrangement but extended credit pending the LSPO application.
The husband accepted he held £10m in liquid shares and did not oppose the principle of an LSPO, though he argued for proportionality. He offered to release £500,000 and pay equal amounts to both parties’ solicitors.
The Court’s Decision
Nicholas Allen KC distinguished between:
- Family Law Act proceedings: Historic costs of £64,000 dismissed (those proceedings had been compromised on a “no order for costs” basis).
- Financial remedy proceedings: Historic costs of £178,000 allowed in full.
Unlike in HA v EN, the judge rejected the Cobb approach. He held that CPR Part 44 proportionality principles do not apply because LSPOs are not Costs Orders. Instead, they are funding mechanisms within ongoing proceedings.
He therefore allowed the wife’s historical costs in full, alongside substantial provision for her future litigation.
Comparing the Two Approaches
Case | Judge | LSPO Award | Treatment of Historical Costs | Approach |
HA v EN | High Court Judge (Fam) | £626,585 | Allowed but subject to 30% discount | Cobb approach – discount applied |
SM v BA | Nicholas Allen KC | £750,000+ | Allowed in full (except compromised proceedings) | Full recovery – no discount |
The difference illustrates an unsettled area of family law. While both judges accepted that wives could not fund litigation without LSPOs, their treatment of historic costs diverged sharply.
Practical Implications
For Applicants
- An LSPO can cover both past and future costs where no other funding is available.
- Be prepared to justify why historic costs are essential to secure ongoing representation.
- Outcomes may vary depending on whether the court follows the Cobb approach.
For Respondents
- Arguments around proportionality may succeed in reducing awards, especially under the Cobb approach.
- However, where assets are abundant, courts are unlikely to refuse funding outright.
For Practitioners
- Carefully document why past costs must be paid to enable future representation (e.g., liens, threat of solicitors “downing tools”).
- Expect robust judicial scrutiny of disclosure and proportionality.
- The debate over whether CPR proportionality principles apply remains live—case strategy may depend on which judge is hearing the application.
Conclusion
The contrasting outcomes in HA v EN and SM v BA highlight a fundamental uncertainty in the LSPO jurisdiction: should historic costs be discounted, or allowed in full?
The Cobb approach seeks to align LSPOs with civil costs assessments, introducing proportionality safeguards. The Allen KC approach rejects that analogy, treating LSPOs as sui generis funding mechanisms, not Costs Orders.
Until the Court of Appeal clarifies the law, outcomes will depend heavily on judicial discretion. For now, family practitioners must prepare for both possibilities, advising clients that awards of historic costs may vary between discounted recovery and full indemnity.
What remains clear is that LSPOs continue to play a vital role in ensuring fairness in big-money divorces, where one party controls the financial firepower. At the same time, courts are increasingly vocal about limiting wasteful litigation and preventing divorce proceedings from descending into financial arms races.
Related Articles:
Protect Your Future: Why a Pre-nup or Post-nup Could Be One of the Smartest Legal Steps You Take
Pre-Nups vs Post-Nups: What’s the Difference — and Why You Might Need One
