is there a level 20 spell effect cap in this game like in BG2? if yes, does it apply to both arcane and divine spells?

No, the spell effect cap is unofficially lvl 30, as that is the cap for character levels. Make sure you read the spell description, though. Some spells are capped (e.g. Fireball, Lightning Bolt, Sunscorch, Flamestrike). The ones that aren't are magnificent killers on later levels (Static Charge, Skull Trap).

<font color = lightgreen>That's odd--none of my spells have a level cap on effects. Oh, wait--I edited them. [img]graemlins/petard.gif[/img] </font>