The Illinois Supreme Court recently held that advance payment retainers paid in dissolution of marriage cases are subject to disgorgement as a temporary relief measure under the Illinois Marriage and Dissolution of Marriage Act, 750 ILCS 5/501 (c-1)(3). The Supreme Court’s unanimous ruling in In re Marriage of Earlywine, 2013 IL 114779, makes clear that if both parties lack the financial ability or access to assets and income needed to pay reasonable attorney’s fees and costs, then attorney’s fees previously paid as advance payment retainers are subject to disgorgement, regardless of whether the source of fees was marital or non-marital or whether the fees were already used by the attorney in possession of the retainer.
So what is disgorgement? The definition of disgorgement is the act of giving up something on demand or by legal compulsion. As a background, if the court determines that both parties in a divorce lack the financial ability or access to assets or income for reasonable attorney fees and costs, the court can order an allocation of available funds for each parry’s counsel-including retainers and/or interim payment previously paid-to achieve substantial parity between the parties per 750 ILCS 5/501(c-1)(3). If such an order is entered requiring an attorney to disgorge his or her funds (previously paid or held in escrow), then that attorney will be required to pay the opposing attorney $X within Y days or risk being held in contempt of court
In reaching its decision, the Supreme Court primarily asked whether or not advance payment retainers aid or impede the legislative goal of achieving substantial parity between parties going through a divorce. The Earlywine decision makes clear that the answer is the latter.
The main point to take from this concept of disgorgement is that the courts look to keep the playing field between you and your spouse “level” or “equal.” If you think that you can intimate or over litigate your case, you may find yourself in a disgorgement situation and/or having to pay your spouses attorneys fees.