The prudent self-funding litigant test

The prudent self-funding litigant test

The person seeking a grant of assistance must give enough information to their lawyer (if any) and to Victoria Legal Aid (VLA) to satisfy VLA that a prudent, self-funding litigant (that is, one with limited financial resources) would risk their own finances in paying for the proposed action, application, defence or response for which they seek the grant.

By this test, the Commonwealth aims to put assisted people into a position equal to, but not better than, people ‘without deep pockets’ (that is, with limited financial resources) who risk their own money in litigation.

A person ‘without deep pockets’ in a family law matter

In a family law matter, a person ‘without deep pockets’ specifically means a person who either:

  • can access funding of no more than $15,510 (including GST)
  • in limited circumstances, may be able to access further funding beyond the ‘ceiling’ of $15,510.

Because costs orders are not routinely made in the family law jurisdiction, the element of ‘risk’ may not apply to many cases. The more relevant question may be whether a prudent litigant would use their own funds for the proposed proceeding.

The test requires the person’s lawyer to prioritise the use of the limited funds available.

Access to funding beyond the cost ceiling

Under Commonwealth family law guidelines, if VLA considers that a person seeking a grant of assistance for a family law matter, or a child who is the subject of an order for separate representation, would suffer undue hardship, then VLA may increase the cost ceiling.

In deciding whether to increase the cost ceiling, VLA must consider:

  • whether the person seeking the grant has incurred significant additional costs because of any of the Commonwealth’s special circumstances
  • whether it would be unreasonable to expect the person seeking the grant of assistance to represent themselves adequately because of any of the Commonwealth’s special circumstances
  • whether the costs of the person seeking the grant of assistance have increased significantly through no fault of their own
  • the number and the complexity of the issues in dispute
  • whether a child’s safety or welfare is likely to be at risk
  • whether the person seeking the grant is an independent children’s lawyer
  • whether it is possible to contain costs by providing in-house legal services or by another appropriate means of funding (for example, negotiating a fee package which is outside VLA’s usual fee scales with a private lawyer).

Specific family law examples

  • A father has interim orders for his child to spend time with him for 24 hours per fortnight. The court counsellor recommends the time be increased to 48 hours per fortnight. The final hearing is listed in eight weeks’ time. There is only $3500 left under the family law cost ceiling. It will cost about $3000 to prepare and run a one-day final hearing. It may not be prudent to issue proceedings to vary the interim orders at a cost of approximately $1600, However, it may be prudent to attempt to negotiate variation of the interim orders through a Victoria Legal Aid Family Dispute Resolution Service conference.
  • A mother has interim orders for her 10 year old child to spend one weekend per month with her, after a long period without any contact with her child. The father has refused to make the child available to spend time with the mother for the first three scheduled periods. The father is unrepresented and says that the child chose not to go. The final hearing is likely to be listed in eight months. There is $8500 left under the family law cost ceiling. The mother’s application for final orders may not succeed unless she can establish a history of successful time spent with her by the child. It may be prudent for the mother to attempt primary dispute resolution through the Victoria Legal Aid Family Dispute Resolution Service.