Over 8,000 divorces are filed in New Zealand annually, and the process isn’t cheap.
While the dissolution fee only costs $242, legal costs can reach into the thousands.
Many couples fall into the so-called ‘missing middle’ — earning too much to access legal aid, but not enough to afford private lawyers.
Australian divorce and separation lender JustFund has launched in New Zealand with the sentiment that access to justice isn’t a privilege, it’s a right.
Their Director of Family Law, Lauren Milne, told Kerre Woodham the average cost of divorce in New Zealand is $30,000 – $15,000 per person.
She says that most people aren’t putting aside a nest egg in case they get divorced, so it can be a struggle to pull together the funds.
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Speaker 1 (00:06):
You're listening to the Carrywood and Mornings podcast from News
Talks Heab.
Speaker 2 (00:11):
More than eight thousand divorces are filed annually in New Zealand.
According to stats n Z data. Many couples fall into
the so called missing middle, earning too much to access
legal aid but not enough to afford private lawyers. You
can be stuck in limbo either because you can't afford
to leave a relationship or settle for less because of
the financial pressure. Australian divorce and separation lender just Fund
(00:36):
has launched in New Zealand with the backing of several
family law firms. The company provides flexible lines of credit
to help those unable to afford legal representation during divorce
or separation proceedings. Director of Family Law for just Fund,
Lauren Milne joins me. Now, very good morning.
Speaker 3 (00:53):
To you, Hi, Gary, Thanks for having me.
Speaker 2 (00:56):
That's okay. I'm just wondering, having sort of been divorced.
I mean, I don't think we've filed the official papers
and things, but why do you need lawyers? It may
sound like a very naive question, but we didn't really
we didn't argue, you know, we didn't really argue.
Speaker 3 (01:17):
Yeah, sure, and there will always be some couples that
don't need to. But if you've got sort of any
area of contention at all, you will need a lawyer
to help you. But also if you want to actually
finalize a legal settlement, then you do need to have
it certified by a lawyer. So you enter into what's
called a Section twenty one a agreement under the Property
Relationships Act, and that needs to be certified by a
(01:39):
lawyer for it to be binding. Otherwise, down the track,
one party can come back and say, actually, I don't
think that was fair, and the whole thing can be
set aside.
Speaker 2 (01:47):
All right, So at some point you're going to need
a lawyer, but most people would be able to manage
it if there was no dispute, that'd be able to
manage the fees.
Speaker 3 (01:59):
Yeah. Sure, If there was no dispute and you had
a pretty simple what we call house and garden matter,
you own a family home and you're just splitting at
fifty to fifty, then you can just draft an agreement
and that will be fine. You've just got the cost
of your lawyer for doing that. But you know, for
some clients, even a couple of thousand dollars is a
real struggle for them to find.
Speaker 2 (02:22):
How many divorces end up in an acrimonious dispute.
Speaker 3 (02:27):
That's a good question. You know, we don't have the
exact data on that, because, as you say, a lot
of couples will just divide their property and they won't
record it formally, and so we don't know that. But
what we do now is at the average cost of
a divorce in New Zealand is thirty thousand dollars, So
that gives you some idea of the per.
Speaker 2 (02:45):
Couple, but like per individual, so sixty thousands for the couple.
Speaker 3 (02:51):
Oh well, I believe thirty thousand for the couple, but
per per perpoty, so that's a lot of you know,
that's a lot of money for the average New Zealander.
And you know most people aren't. Of course, they're not
saving for a divorce. It can be it can be unexpected.
They don't put aside in their st egg in case
in case they get divorced, So it can be really
a struggle for a lot of people.
Speaker 2 (03:13):
Yeah, would finding fifteen thousand dollars in the midst of
view of your grief and your pain. So that's right,
How does it work? How do you work?
Speaker 3 (03:23):
So we basically accept applications on behalf of clients or
the lawyers can apply on their behalf, and we effectively
offer a flexible line of credit for clients. So they
come to us, so their lawyers will tell us how
much they think it's going to cost, and we approve
that amount. They can then draw down sort of as
much or as little as they need. And you know,
(03:46):
in a sense, we're we're lending money to pay legal fees.
And that sounds simple, but as I've said, it's a
solution to a very real problem because if it's if
it's ten thousand, or if it's two hundred thousand, you
just don't have that sort of money lying around. And
you know, you need good legal representation to get a
fair outcome where you've got, you know, a contentious separation.
Speaker 2 (04:06):
Haven't you been able to find lawyers who will act
on your behalf in the expectation of getting paid once
they've settled the divorce.
Speaker 3 (04:15):
Yeah, Look, I mean family lawyers by their nature have
big hearts and they're not doing it for the money.
They've gone into family law to help people. So most
of the firms we're speaking to are doing their best
to carry their clients, but they're not banks. They have
to pay rent, they have to pay their staff, and
really the scale of the problems just too big for
them to solve. So they need cashflow just like any
other business so they can get on with the job
(04:37):
of helping their clients. So that they are doing it.
But it's a real struggle, and particularly in this economic
client that they're finding it more and more difficult. They're
having to turn away clients because they just can't afford
to carry them.
Speaker 2 (04:49):
All right, And what's the interest rate?
Speaker 3 (04:53):
The interest rate, it's a variable interest rate, so it
does depend on the amount that you need to borrow,
but it ranges from nine point nine to twelve point
nine percent depending on the level of credit that we approve.
Speaker 2 (05:06):
Right, And isn't there isn't it in the best interests
of lawyers to keep the case alive so they've got
more billable hours. You're for some unscrupulous lawyers.
Speaker 3 (05:16):
Yeah, I mean I understand, I understand where I understand
where you're coming from. So we only pay invoices once
they're approved by a client, So it's there are no
sort of lawyers are in no better off position in
that sense than they would be ordinarily, a client has
the ability to approve that invoice, and they have the
ability to go to the law society, and if they
think that an unfair amount has been charged, they can
(05:38):
go to the law society and get that fee reviews
in the ordinary way. So we don't pay invoices unless
they've already been okayed by the client.
Speaker 2 (05:46):
And when you have lawyers that work together to help
couples disentangle themselves, what are the main issues that people
argue over or have sticking points over.
Speaker 3 (06:03):
Yeah, there's I mean, you know, there's a number number
of legal issues really. I mean one is if you
have a you know, one party and we act for
a lot of our borrow as a woman, and they're
typically the primary caregiver and they haven't worked for ten years,
and so the law tries to recognize that, and it
can allow for compensation for what we call economic disparity.
(06:26):
So there can be arguments over how much compensation that
party should get, for example. There can be also arguments over,
for example, what what is one party separate property? What
is relationship property? Those are some of the really key
issues that can be very contentious you know, also there
might be claims against trust property. You know, New Zealand
(06:47):
has one of the highest rates of trust ownership in
the world, and you know, some parties put things in
trust and try to keep them out of the relationship
property pool. And so there's a number of arguments you
can have in that regard as well.
Speaker 2 (07:02):
When it comes to the children and pets, because I've
got a text here from Muz saying our biggest fight
after the separation was over the dog. Kids fifty to fifty,
house fifty to fifty, but oh my god, the dog
was horrendous.
Speaker 3 (07:15):
That is a huge one. Yeah, I've had a number
of cases where that that's.
Speaker 2 (07:19):
Been an issue.
Speaker 3 (07:20):
And obviously for a lot of people, myself included, dogs
are like, you know, they're a member of your family,
and so that's another that's another big issue. And you know,
it's you can have arguments over chattels, you can have
arguments over you know, people are very they're in a
very vulnerable position. They're often they feel like this divorce
has been forced on them. They're not at the lowest
(07:42):
point of their lives, and so things that might seem
really inconsequential to you or me might take on a
greater level of importance at that point than they otherwise
was how.
Speaker 2 (07:54):
Do you manage to get the resolution? Is that the
skill that you're paying for when you pay for a lawyer.
Speaker 3 (08:02):
That's absolutely right. I mean, a good lawyer can make
all the difference. And now there's an increasing number of
parties that are choosing to be self represented in New
Zealand recently. It's because they can't because they can't afford
a lawyer. And you are at a real disadvantage, and
you're at a real disadvantage if your ex is choosing
to be self represented. You know, I've had clients where
(08:23):
that's happened and their ex partner has filed countless applications,
countless appeals, and they've had no choice but to respond
to that using their own lawyer. And that of course
costs money. So if you've got two good lawyers on
either side, you know, family lawyers have a duty to
be conciliatory and to try and reach a resolution. So
you know, obviously there's this understanding that lawyers cost money,
(08:46):
but lawyers also can save you money if they're doing
their job properly, and you can reach a resolution quicker.
Speaker 2 (08:52):
And when it comes to the family court in terms
of custody of children and custodial disputes, does the line
of credit extend there or are you steering well clear
of that? Because that.
Speaker 3 (09:05):
It is awful and we do cover we do cover
legal fees for care of children disputes provided there's also
a relationship property aspect attached to it. So and that's
pretty common. It is pretty common that the two run
hand in hand. And also sometimes you know, that is
used against a party. So again, I've had situations where
(09:29):
the party on the other side has tried to paint
that the parent as a as an unfit parent, and
you know, they might be allegations of alcohol abuse or
or physical violence to try and keep their children from them,
And it's used as a it's used as a tactic
that runs hand in hand with the relationship property dispute.
(09:49):
So you know, they won't they won't resolve the relationship
property dispute until that aspect of its resolved.
Speaker 2 (09:56):
It's just a shame it's needed, isn't it? A because
of the cost of living and b because hopes and
dreams burn.
Speaker 3 (10:05):
Yeah, I mean that's right, And you know, the system
is not perfect. And family lawyers are doing their best.
The system, as they said, is not is not perfect,
and there is legal aid for some clients, but as
you said in your introduction, legal aid doesn't not everyone's
eligible for legal aid, and there is this gap that
the actual the income threshold for legal aid is pretty low.
(10:26):
It also takes into account assets and so if you're
not eligible for that. There's also it's actually really quite
difficult in some areas to find a legal aid lawyer
because there's not a lot of them around. So if
you're in that, as you said, the missing middle, where
you're not eligible for legal aid but you can't afford
legal fees yourself, that's where we can step in and
(10:47):
bridge that gap.
Speaker 2 (10:48):
Okay, just final question before we go, can you ask
your guests is it necessary for both parties to have
a formal separation agreement?
Speaker 3 (10:57):
As I said earlier, it's necessary in the sense that
it's not binding unless it's certified by a lawyer. So
if you think it's if you think it's going to
be completely non contentious, if it's a family home and
you want to just split it for MFD the then great,
you can probably just go about your life. But what
you don't want is for in a few years time,
(11:17):
the other party to come back and say, actually, I
was a stay at home parent and I think I'm
actually entitled to more than fifty percent of that family home.
So you know what happened there wasn't binding and we
have to revisit things and that can be really difficult
for obvious reasons.
Speaker 2 (11:33):
Absolutely, thank you so much, Lauren Lauren Milne, director of
Family Law and z for Just Fund, and a family
law barrister, talking about the new facility enabling a line
of credit to be launched for those unable to afford
legal representation during divorce or separation.
Speaker 1 (11:50):
For more from Kerry Wooden Mornings, listen live to News
Talks a B from nine am weekdays, or follow the
podcast on iHeartRadio
You're listening to the Carrywood and Mornings podcast from News
Talks Heab.
Speaker 2 (00:11):
More than eight thousand divorces are filed annually in New Zealand.
According to stats n Z data. Many couples fall into
the so called missing middle, earning too much to access
legal aid but not enough to afford private lawyers. You
can be stuck in limbo either because you can't afford
to leave a relationship or settle for less because of
the financial pressure. Australian divorce and separation lender just Fund
(00:36):
has launched in New Zealand with the backing of several
family law firms. The company provides flexible lines of credit
to help those unable to afford legal representation during divorce
or separation proceedings. Director of Family Law for just Fund,
Lauren Milne joins me. Now, very good morning.
Speaker 3 (00:53):
To you, Hi, Gary, Thanks for having me.
Speaker 2 (00:56):
That's okay. I'm just wondering, having sort of been divorced.
I mean, I don't think we've filed the official papers
and things, but why do you need lawyers? It may
sound like a very naive question, but we didn't really
we didn't argue, you know, we didn't really argue.
Speaker 3 (01:17):
Yeah, sure, and there will always be some couples that
don't need to. But if you've got sort of any
area of contention at all, you will need a lawyer
to help you. But also if you want to actually
finalize a legal settlement, then you do need to have
it certified by a lawyer. So you enter into what's
called a Section twenty one a agreement under the Property
Relationships Act, and that needs to be certified by a
(01:39):
lawyer for it to be binding. Otherwise, down the track,
one party can come back and say, actually, I don't
think that was fair, and the whole thing can be
set aside.
Speaker 2 (01:47):
All right, So at some point you're going to need
a lawyer, but most people would be able to manage
it if there was no dispute, that'd be able to
manage the fees.
Speaker 3 (01:59):
Yeah. Sure, If there was no dispute and you had
a pretty simple what we call house and garden matter,
you own a family home and you're just splitting at
fifty to fifty, then you can just draft an agreement
and that will be fine. You've just got the cost
of your lawyer for doing that. But you know, for
some clients, even a couple of thousand dollars is a
real struggle for them to find.
Speaker 2 (02:22):
How many divorces end up in an acrimonious dispute.
Speaker 3 (02:27):
That's a good question. You know, we don't have the
exact data on that, because, as you say, a lot
of couples will just divide their property and they won't
record it formally, and so we don't know that. But
what we do now is at the average cost of
a divorce in New Zealand is thirty thousand dollars, So
that gives you some idea of the per.
Speaker 2 (02:45):
Couple, but like per individual, so sixty thousands for the couple.
Speaker 3 (02:51):
Oh well, I believe thirty thousand for the couple, but
per per perpoty, so that's a lot of you know,
that's a lot of money for the average New Zealander.
And you know most people aren't. Of course, they're not
saving for a divorce. It can be it can be unexpected.
They don't put aside in their st egg in case
in case they get divorced, So it can be really
a struggle for a lot of people.
Speaker 2 (03:13):
Yeah, would finding fifteen thousand dollars in the midst of
view of your grief and your pain. So that's right,
How does it work? How do you work?
Speaker 3 (03:23):
So we basically accept applications on behalf of clients or
the lawyers can apply on their behalf, and we effectively
offer a flexible line of credit for clients. So they
come to us, so their lawyers will tell us how
much they think it's going to cost, and we approve
that amount. They can then draw down sort of as
much or as little as they need. And you know,
(03:46):
in a sense, we're we're lending money to pay legal fees.
And that sounds simple, but as I've said, it's a
solution to a very real problem because if it's if
it's ten thousand, or if it's two hundred thousand, you
just don't have that sort of money lying around. And
you know, you need good legal representation to get a
fair outcome where you've got, you know, a contentious separation.
Speaker 2 (04:06):
Haven't you been able to find lawyers who will act
on your behalf in the expectation of getting paid once
they've settled the divorce.
Speaker 3 (04:15):
Yeah, Look, I mean family lawyers by their nature have
big hearts and they're not doing it for the money.
They've gone into family law to help people. So most
of the firms we're speaking to are doing their best
to carry their clients, but they're not banks. They have
to pay rent, they have to pay their staff, and
really the scale of the problems just too big for
them to solve. So they need cashflow just like any
other business so they can get on with the job
(04:37):
of helping their clients. So that they are doing it.
But it's a real struggle, and particularly in this economic
client that they're finding it more and more difficult. They're
having to turn away clients because they just can't afford
to carry them.
Speaker 2 (04:49):
All right, And what's the interest rate?
Speaker 3 (04:53):
The interest rate, it's a variable interest rate, so it
does depend on the amount that you need to borrow,
but it ranges from nine point nine to twelve point
nine percent depending on the level of credit that we approve.
Speaker 2 (05:06):
Right, And isn't there isn't it in the best interests
of lawyers to keep the case alive so they've got
more billable hours. You're for some unscrupulous lawyers.
Speaker 3 (05:16):
Yeah, I mean I understand, I understand where I understand
where you're coming from. So we only pay invoices once
they're approved by a client, So it's there are no
sort of lawyers are in no better off position in
that sense than they would be ordinarily, a client has
the ability to approve that invoice, and they have the
ability to go to the law society, and if they
think that an unfair amount has been charged, they can
(05:38):
go to the law society and get that fee reviews
in the ordinary way. So we don't pay invoices unless
they've already been okayed by the client.
Speaker 2 (05:46):
And when you have lawyers that work together to help
couples disentangle themselves, what are the main issues that people
argue over or have sticking points over.
Speaker 3 (06:03):
Yeah, there's I mean, you know, there's a number number
of legal issues really. I mean one is if you
have a you know, one party and we act for
a lot of our borrow as a woman, and they're
typically the primary caregiver and they haven't worked for ten years,
and so the law tries to recognize that, and it
can allow for compensation for what we call economic disparity.
(06:26):
So there can be arguments over how much compensation that
party should get, for example. There can be also arguments over,
for example, what what is one party separate property? What
is relationship property? Those are some of the really key
issues that can be very contentious you know, also there
might be claims against trust property. You know, New Zealand
(06:47):
has one of the highest rates of trust ownership in
the world, and you know, some parties put things in
trust and try to keep them out of the relationship
property pool. And so there's a number of arguments you
can have in that regard as well.
Speaker 2 (07:02):
When it comes to the children and pets, because I've
got a text here from Muz saying our biggest fight
after the separation was over the dog. Kids fifty to fifty,
house fifty to fifty, but oh my god, the dog
was horrendous.
Speaker 3 (07:15):
That is a huge one. Yeah, I've had a number
of cases where that that's.
Speaker 2 (07:19):
Been an issue.
Speaker 3 (07:20):
And obviously for a lot of people, myself included, dogs
are like, you know, they're a member of your family,
and so that's another that's another big issue. And you know,
it's you can have arguments over chattels, you can have
arguments over you know, people are very they're in a
very vulnerable position. They're often they feel like this divorce
has been forced on them. They're not at the lowest
(07:42):
point of their lives, and so things that might seem
really inconsequential to you or me might take on a
greater level of importance at that point than they otherwise
was how.
Speaker 2 (07:54):
Do you manage to get the resolution? Is that the
skill that you're paying for when you pay for a lawyer.
Speaker 3 (08:02):
That's absolutely right. I mean, a good lawyer can make
all the difference. And now there's an increasing number of
parties that are choosing to be self represented in New
Zealand recently. It's because they can't because they can't afford
a lawyer. And you are at a real disadvantage, and
you're at a real disadvantage if your ex is choosing
to be self represented. You know, I've had clients where
(08:23):
that's happened and their ex partner has filed countless applications,
countless appeals, and they've had no choice but to respond
to that using their own lawyer. And that of course
costs money. So if you've got two good lawyers on
either side, you know, family lawyers have a duty to
be conciliatory and to try and reach a resolution. So
you know, obviously there's this understanding that lawyers cost money,
(08:46):
but lawyers also can save you money if they're doing
their job properly, and you can reach a resolution quicker.
Speaker 2 (08:52):
And when it comes to the family court in terms
of custody of children and custodial disputes, does the line
of credit extend there or are you steering well clear
of that? Because that.
Speaker 3 (09:05):
It is awful and we do cover we do cover
legal fees for care of children disputes provided there's also
a relationship property aspect attached to it. So and that's
pretty common. It is pretty common that the two run
hand in hand. And also sometimes you know, that is
used against a party. So again, I've had situations where
(09:29):
the party on the other side has tried to paint
that the parent as a as an unfit parent, and
you know, they might be allegations of alcohol abuse or
or physical violence to try and keep their children from them,
And it's used as a it's used as a tactic
that runs hand in hand with the relationship property dispute.
(09:49):
So you know, they won't they won't resolve the relationship
property dispute until that aspect of its resolved.
Speaker 2 (09:56):
It's just a shame it's needed, isn't it? A because
of the cost of living and b because hopes and
dreams burn.
Speaker 3 (10:05):
Yeah, I mean that's right, And you know, the system
is not perfect. And family lawyers are doing their best.
The system, as they said, is not is not perfect,
and there is legal aid for some clients, but as
you said in your introduction, legal aid doesn't not everyone's
eligible for legal aid, and there is this gap that
the actual the income threshold for legal aid is pretty low.
(10:26):
It also takes into account assets and so if you're
not eligible for that. There's also it's actually really quite
difficult in some areas to find a legal aid lawyer
because there's not a lot of them around. So if
you're in that, as you said, the missing middle, where
you're not eligible for legal aid but you can't afford
legal fees yourself, that's where we can step in and
(10:47):
bridge that gap.
Speaker 2 (10:48):
Okay, just final question before we go, can you ask
your guests is it necessary for both parties to have
a formal separation agreement?
Speaker 3 (10:57):
As I said earlier, it's necessary in the sense that
it's not binding unless it's certified by a lawyer. So
if you think it's if you think it's going to
be completely non contentious, if it's a family home and
you want to just split it for MFD the then great,
you can probably just go about your life. But what
you don't want is for in a few years time,
(11:17):
the other party to come back and say, actually, I
was a stay at home parent and I think I'm
actually entitled to more than fifty percent of that family home.
So you know what happened there wasn't binding and we
have to revisit things and that can be really difficult
for obvious reasons.
Speaker 2 (11:33):
Absolutely, thank you so much, Lauren Lauren Milne, director of
Family Law and z for Just Fund, and a family
law barrister, talking about the new facility enabling a line
of credit to be launched for those unable to afford
legal representation during divorce or separation.
Speaker 1 (11:50):
For more from Kerry Wooden Mornings, listen live to News
Talks a B from nine am weekdays, or follow the
podcast on iHeartRadio
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