The importance of dealing with finances on divorce
Finances are often the most complicated issue arising from a divorce and resolving financial matters, can take longer than the divorce itself.
The decisions that you make when dealing with finances on divorce and how you record the agreements you reach, may well have a considerable impact on your financial security for many years to come.
When a couple marry, they gain certain legal rights against the income, property and pension of their spouse, and until such time as a Consent Order is entered into by the parties and sealed by the Court providing for the dismissal of these claims, these claims will remain open, even after divorce.
Can we agree financial matters between us?
If you and your spouse are able to communicate amicably and have full knowledge of each other’s finances, you can reach an agreement between you or with the help of a mediator.
It is however advisable to take separate legal advice on your financial rights on divorce to ensure that the terms of any settlement you reach with your spouse are fair and reasonable.
Your solicitor will need disclosure of both yours and your spouse’s finances in order to provide full and comprehensive advice, however your solicitor should be able to provide you with broad advice on financial matters if you have a thorough understanding of your spouse’s finances.
Once you have reached an agreement with your spouse, either with or without the assistance of a Mediator, your solicitor will draft the Consent Order which records the terms of the agreement. Once signed, this will be submitted to the Court for sealing. You will then have a legally binding and enforceable Court order providing for the dismissal of certain claims in accordance with the agreement reached.
What is a Family Mediator?
A family mediator is a neutral third party who is trained to help couples resolve matters between them. No decision can be imposed by the mediator. The mediator is impartial and will not express a personal opinion or give legal advice.
Couples can attend mediation to try and resolve issues relating to finances or children matters.
Those couples who are looking to issue Court proceedings to resolve financial matters must also now also attend a mediation information and assessment meeting prior to issuing proceedings – see below.
What are the options if we can’t agree on financial matters?
In many cases, the parties are unable to resolve matters between them and/or they prefer to have a solicitor acting for them in respect of the negotiations.
Financial matters can be dealt with through solicitors and the parties will have the option of trying to deal with matters on a voluntary basis or by issuing Court proceedings.
How are finances dealt with on a voluntary basis?
It is possible in many cases to deal with finances by way of voluntary exchange of financial disclosure.
Your solicitor will agree a timetable with your spouse or his or her solicitor for the exchange of financial disclosure. It is usual to use a Form known as a Form E which is used by the Courts for the financial disclosure process.
The Form E requires the parties to provide full and frank disclosure of all assets and liabilities and to provide details of the parties’ income, outgoings and housing needs.
Once financial disclosure has been exchanged, the parties have an opportunity to raise any queries they have on each other’s disclosure and a timetable is usually set for each party to reply to these queries.
When each party consider that they have a full understanding of their spouse’s finances, negotiations can take place. In the event that the parties are unable to reach an agreement on finances, Court proceedings can be issued.
How do the Courts deal with finances?
If the parties are unable to reach an agreement through solicitors on a voluntary basis or the case is such that Court proceedings are required from the outset, an application to the Court can be made.
The Family Procedure Rules 2010, effective from 6 April 2011, provide that parties must be able to show when issuing proceedings that they have either attended a mediation and information assessment meeting with a mediator or that they are exempt from doing so. The exemptions are limited, but include for example cases where there is domestic violence. There is no obligation to attend mediation, only an assessment meeting, even if the parties are assessed as suitable for mediation.
First Appointment
Once the application is issued with the Court, the Court will list the matter for a First Appointment and set a timetable for certain documents to be drafted, exchanged with your spouse and filed with the Court. This includes an exchange of sworn Forms E which will need to be updated if already completed as part of the voluntary process detailed above.
The First Appointment will be listed approximately 12 weeks after the application is issued with the Court. The First Appointment is a short hearing of no more than 30-45 minutes. At the hearing, the Judge will then consider any questions raised by the parties on each other’s financial disclosure and set a timetable for these questions to be answered. If any formal valuations of the assets are required, the Court will set a timetable for this also. Assuming that you instruct a solicitor, your legal representative will represent you at the hearing and you will not be required to give evidence or speak in Court.
The matter will then be listed for the next hearing, known as the Financial Dispute Resolution hearing (or FDR) which will take place approximately 12 weeks after the First Appointment.
Financial Dispute Resolution (FDR)
At the FDR hearing, you will attend Court 1 hour before the hearing for the purpose of negotiations. You will then go into Court with your legal representative. Both legal representatives (assuming your spouse is also represented) will present their cases to the Judge and explain the proposals for settlement which have been put forward. The Judge will give an indication as to the Order that the Court would make if the parties are unable to reach an agreement and the matter proceeds to a Final Hearing.
After the Judge has given his or her indication, the parties are given further time to negotiate in the hope that an agreement can be reached. If an agreement is reached, this will be recorded in a Consent Order, which is a legal binding and enforceable Court order made with the consent of both parties. If an agreement cannot be reached at the FDR, the Judge will list the matter for a Final Hearing.
Final Hearing
At the Final Hearing, the Judge will consider the case in detail and hear oral evidence from both parties who will be cross-examined by the other party’s barrister. The hearing is usually listed for 1-2 days, but sometimes longer depending on the complexity of the case.
At the end of the hearing, the judge will gives his or her Judgment setting out the details of the case, the decision which he or she has made and the rationale for this decision. A Final Order will then be made by the Judge, which again will be a legally binding and enforceable Court order.
If you would like advice on the above matters, please contact a member of our family team:-
Valerie Cooper:-
Tel: 01932 833902
Email: vcooper@crellinscarter.co.uk
Samantha Mabey:-
Tel: 01932 833902
Email: smabey@crellinscarter.co.uk
