Hi again,
Well it is strange that she has not secured British Citizenship. She spent 15 years in Spain, therefore i believe she must have spent a great deal of time in the UK. About 30 years of her life to be precise. However since she had left the UK for over 2 years and never returned, the chances are there is no PR, even if there were, it would have expired anyway, due to the length of absence.
I am not sure about the position of the DLR application, but i don't think it is the best solution. Firstly the UK takes years to deal with those application, and sometimes the refuse without a right of appeal, even though the applicant would have a strong convention rights claim, if the decision was appeal-able.
Applying under the EEA rules is more straightforward, and free, and in the event of a refusal, you have a right of appeal, and then you have the opportunity to go to court, and the chances are, your appeal will either be allowed under the EEA regulations or Article 8.
I don't think your ex leaving work to look after your child is conclusive of the matter. She might have had maternity leave, which is considered as still working, even if she didn't, there is a case pending at the C JEU, on whether or not mother who were previously employed, should lose their workers status, when they take time of to look after their child, in cases were there is no fixed contract and there was no maternity leave.
Also, i believe your daughter is German, according to the rules governing German nationality.
There are two options for you, you can either apply to retain your residence on the basis that their is a court order, and that access has to take place in the UK, and that she is in school in the UK. When decisions of this nature are made, the best interest of the child has to be the primary consideration, therefore the inability to provide evidence she was a qualified person at the time of divorce, will carry less weight than the best interest of the child.
The other option is possibly, applying for a Medical insurance for her, and with the terms of the contact order and her German citizenship, apply under the EEA regulation, as the joint primary carer of the child.
It will not be a straightforward application, but it may succeed.
That is my assessment for the time being. I might come up with more later, as i study your case further.
In the absence of documentary evidence of treaty rights covering the period you were a family member of your wife, i concur with the first solicitor that an application under the 10 years lawful residence policy is bound to fail, the guidance on this is pretty clear and straightforward.
Guidance on Long Residence Page 37