What is a Sears Tooth Agreement?

When going through a divorce, the last thing you want is additional worries. You are already worried about divorce property settlements or trying to understand your rights to property after a separation.

Unfortunately, you must consider solicitor fees if your divorce is contentious or complex. These fees can add up, leaving you wondering what would be the best option to cover them. This is where a Sears Tooth Agreement comes into play.

It makes it easy for you to pay the solicitor for their help during the divorce process without leaving you struggling financially. It also ensures that you and your former partner can access the best legal help possible.

Understandably, you might be wondering how this system works. This article will explain everything you need to know about Sears Tooth Agreements, from how they work to their advantages.

What is a Sears Tooth Agreement?

A Sears Tooth agreement is a deed that assigns your solicitor a portion of your divorce settlement to help them cover all the costs they incurred during the entire legal process. In other words, your lawyer does not require you to pay any fees upfront.

You will use the proceeds of the divorce settlement to cover all the legal fees. When the case is over, and you finally get your settlement, you should first pay the solicitor in full.

A Sears Tooth Agreement operates like a credit agreement. Your solicitor extends you a loan, and you repay it in full when you receive your divorce settlement.

You and the solicitor must first agree on the appropriate divorce settlement amount before signing the deed. Once you agree, you must disclose it to the court to make it a legally binding contract.

When is a Sears Tooth Agreement Most Suitable?

A Sears Agreement is only suitable when you are confident that you will win a divorce case. It is also suitable when there is a high possibility of receiving a substantial financial settlement, enough to cover the lawyer’s fees.

An example is when a limited company is involved in a divorce. In this case, the chances of a high settlement are higher because the court does not protect a limited company from a divorce. The court treats limited companies the same way it would treat sole entrepreneurs or partnerships.

It may order that business shares be distributed among the divorcing parties or order the sale of the entire company to split the assets. If selling the business is not an option, the court will require your partner to give you alternative assets as a substitute for the company’s value. The alternative assets could be a car, a portion of your home, or any other valuable asset.

The bottom line is that a Sears Tooth Agreement would be most suitable if your divorce is likely to result in a high financial settlement. The Sears Agreement is especially vital today, now that legal aid in England and Wales is no longer available to cover the cost of dissolution or divorce. You are only entitled to legal aid if your divorce case involves domestic abuse, child abduction, or if you are facing the risk of becoming homeless.

What Are the Benefits of a Sears Tooth Agreement?

There are several benefits that come with using a Sears Tooth Agreement during your divorce. One is that you don’t have to borrow money from financial institutions or anyone else to pay your solicitor.

Borrowing could be challenging if you have a poor credit score or no savings. Plus, considering that a divorce is a stressful event, the last thing you need is to worry about how you will come up with the money to pay the solicitor.

A Sears Tooth Agreement also saves you the cost and time required to apply for other funding alternatives. The application process for other funding options, such as a bank loan, could be lengthy.

You might also be required to provide significant documentation, which can be stressful and time-consuming. On the other hand, all you need to do to get a Sears Agreement is sign the contract.

Another significant advantage of using this system is that it protects both you and your former partner from expensive legal bills. This way, each of you can get independent legal help without putting a strain on your finances.

With a Sears Tooth Agreement, you can get the best legal help possible without worrying about how much it will cost you. The lawyer would only take their pay from the divorce settlement, which means they will work harder to ensure you get a fair share. The solicitor will be fully invested in your case because the last thing they want is to not get paid at all.

The best thing is that there is a high possibility of getting the best legal help possible because you will have access to lawyers who are not afraid to take on risky cases. Only experienced and self-confident attorneys would be willing to take on such a case.

What Are the Risks of a Sears Tooth Agreement?

Like with anything else, there are some risks associated with using a Sears Tooth Agreement during your divorce. However, the solicitor bears the biggest risk.

As mentioned earlier, the solicitor only gets paid if you win the case and receive a high financial settlement. If your divorce is unsuccessful or you don’t get a favourable settlement, the lawyer doesn’t get anything. Sometimes, the lawyer may even have to pay some of the costs of the failed divorce case.

The biggest risk, however, is that you may not receive the best legal help possible. Since the lawyer only gets paid if you win, they may not be as inclined to take on your case if it is risky. They may also try to settle for a lower amount than what you are owed just so they can get paid.

What Are the Requirements in a Sears Tooth Agreement?

Before you agree to a Sears Agreement, you must consult your legal advisor. They will help you predict a more accurate settlement amount to negotiate a better rate with your lawyer.

This is where a divorce financial settlement calculator will be helpful. The calculator will give you a rough estimate of what you will receive during a divorce. However, these calculators should not replace the advice of a knowledgeable divorce solicitor.

When meeting with your legal advisor, you should list your finances and assets that will be considered during the divorce settlement. They may advise you to fill out Divorce Form E. You and your spouse must complete this document if you want the court to handle financial matters arising from your marriage dissolution.

The form sets out all the necessary information about your financial position. An experienced divorce lawyer will advise you on how to fill out the form, so you don’t fall into the temptation of hiding money in a divorce. If you go this route, your partner may hire a forensic accountant to find the hidden income and assets, and the court will penalise you.

Once you list your assets and finances, there will be a valuation of the relevant assets. The legal advisor can then assess the settlement and the assets you will likely get after a divorce.

After an assessment, you can consider the value of easily realisable and liquid assets. This is the amount you will use to cover the cost of the settlement.

Once you agree on the cost and the terms of the Sears Tooth Agreement, a lawyer will draft a deed of retainer and assignment. Only an independent legal advisor is allowed to witness the deed before it is submitted to the court.

Once the court accepts the deed, it becomes a legally binding contract. Your solicitor will send the signed deed to your partner or legal representative. The deed will be discharged when the court issues a financial order detailing how you and your spouse will handle your finances after divorce.

You should also get an expert to review the agreement before you sign it. This is essential because you must ensure that the contract terms favour you. You don’t want to end up in a worse position than you were before just because you didn’t take the time to review the agreement.

You must also have a solid understanding of the law and your rights before you sign anything. This way, you can be certain that you are not unknowingly signing away any of your rights.

What are the Alternatives to a Sear Tooth Agreement?

Not all family lawyers will accept a Sears Tooth Agreement because of the risk of not recovering their costs after a settlement. But does that mean you can’t get legal help because you can’t afford it? No, there are other ways to meet the legal costs associated with a divorce.

Here are some of the alternatives:

Borrowing From Friends and Family

You can ask your friends or family to lend you the money so you can pay for a lawyer. You can then repay them once you get the settlement from your divorce. The main benefit of borrowing from your circle is that they won’t charge you any interest.

On the downside, they may not have the money to lend you, especially if they are also struggling financially. And if you can’t repay them, it could damage your relationship. Some people who lend you money won’t care whether you win a divorce settlement or not.

Credit Cards and Bank Loans

If your credit score is good, you could take out a loan or put the legal fees on a credit card. Make sure you can afford the repayments because defaulting on them will damage your credit score.

A bank loan is a quick fix, and the bank may lend you a huge amount of money. The main advantage of this method is that you can spread the cost over a period of time. You can also shop around for the best interest rates.

However, you should be concerned about the interest rates as they are usually high. The interest can add to the cost of your divorce.

Legal Services Payment Order

A question that usually crops up during a divorce is who should pay the divorce costs. The answer to this question is that both parties are usually responsible for their own legal costs.

However, the court can sometimes make a “Legal Services Order.” A legal services payment order is an order from the court that says that your spouse must pay for your legal fees. This is a good option if you can’t afford to pay for a lawyer and your spouse can.

The court will only make this type of order if it believes it is fair and just. The court will also look at the financial circumstances of both spouses before making a decision. If one spouse can afford to pay and the other can’t, the court may order that the richer spouse pay the poorer spouse’s legal fees.

The advantage of this method is that you don’t have to find the money to pay for a lawyer. However, getting the order can take a long time, and your spouse may not cooperate.

Maintenance Pending Suit

If you are going through a divorce, you may be able to ask your spouse for financial support during the proceedings. This option is viable if you depend financially on your spouse. You can apply to the court for your financially strong partner to pay for maintenance. In turn, you can use these payments to fund your legal costs.

The advantage of this method is that it can help you cover your living expenses and legal fees simultaneously. On the downside, it can take a long time to get the payments from your spouse, and they may not be willing to cooperate.

Litigation Lenders

Litigation lenders are specialised companies that will lend you money to fund your legal costs. The lenders will deduct the loan amount from your divorce settlement.

However, this funding has strict criteria because the lender will need to be sure that you will succeed in your divorce case. You can contact the experienced team at Austin Kemp so they can connect you to a reliable litigation lender.

Do All Divorce Law Specialists Accept a Sears Tooth Agreement?

As we mentioned earlier, not all divorce lawyers will accept a Sears Tooth Agreement because it carries significant risk. Under this arrangement, the lawyer has to pay all your legal costs.

In a divorce settlement, these costs may be high as they might include court application fees, forensic accounting fees, and barrister’s fees, among others. These costs could add up and result in a high legal bill.

Most lawyers are not willing to bear these costs, especially when the prospects of winning your divorce case are low. They will consider the finances and the financial assets at stake and try to predict what you are entitled to. If your share after dividing the assets is high, they will take the risk and accept a Sears Tooth Agreement.

What Factors Should You Consider When Deciding Whether to Use a Sears Tooth Agreement?

You should consider several factors before deciding whether a Sears Tooth Agreement is the best option in your divorce case. These include:

The Complexity of Your Case: If your divorce is complex, it may be difficult to predict the outcome. In such cases, lawyers are usually unwilling to accept a Sears Tooth Agreement as they may have to bear the entire cost if you lose the case.

The Amount of Money at Stake: If a lot of money is at stake in ancillary relief, lawyers may be more willing to take the risk as they will get a larger share of the assets if you win. For instance, if you are entitled to a larger portion of matrimonial assets, such as money in the bank, a house, or a business, your lawyer may be more likely to agree to a Sears Tooth Agreement.

The Liquidity of Assets: If the assets are not liquid, it may be difficult for your lawyer to get paid even if you win the case. For instance, if your business is the main asset, it may be difficult to sell it quickly enough to pay your lawyer. In such cases, lawyers may be less likely to agree to a Sears Agreement.

Contact Austin Kemp for Advice on Paying for Your Legal Costs

Divorce fees can get in the way of seeking legal help, especially if you have a limited budget. Fortunately, a Sears Tooth Agreement can help you get around this problem by ensuring that your lawyer gets paid after the settlement.

At Austin Kemp Solicitors, we understand that you might have concerns about paying the legal costs during a divorce. Our team will advise you on the best way to fund your divorce case based on the unique circumstances of your situation. We will ensure that you secure the best outcome for your case while saving money.

Contact us today to learn more about our fees and payment options.