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Financial Issues upon Divorce

 

Related Material

 

Division of Assets

Financial Disclosure

Collaborative Law

Within divorce proceedings, financial matters assume a very high priority.  You need to consider how to divide property, money, business assets and pensions.  Any maintenance payments also need to be formalised.

 

Legal advice is vital to ensure a fair financial settlement between divorcing couples.  There are a variety of ways in which a settlement can be concluded:

 

•  Direct discussions between the parties

•  Negotiation via solicitors

•  Mediation

•  Collaboration

•  Arbitration

•  Court proceedings

 

In each scenario, full financial disclosure is required from each party to enable solicitors to advise as to what is fair.   Let’s take a closer look at some of the options:

 

Mediation

 

This involves a third party helping couples to talk things through and reach agreement.  Mediators are specially trained to do this.  Mediation reduces tension and hostility and keeps communication channels open.  It is also cost effective.  Parties still need legal advice from a solicitor to ensure that any decisions they make during the mediation process are appropriate. 

 

If agreement is reached, one of the solicitors prepares a Consent Order which is then sent to the court for approval by a Judge in order to make it legally binding.  It is usually unnecessary for either party to attend court.

 

Collaboration

 

The parties and their solicitors sit down together to work out an equitable and binding agreement.  Other professionals such as family consultants and financial advisers can also be involved in the process.  Negotiations take place at face to face meetings rather than via correspondence.  The parties are in control of the process, without the threat of court proceedings.  Effective communication is maintained between the parties. 

 

If agreement can be reached, a Consent Order is sent to the court for approval by a Judge in order to make it legally binding.  Neither party usually needs to attend court.

 

Arbitration

 

If agreement cannot be reached using one of the above methods, then the parties can use the arbitration process.  Arbitration works like a private court where a paid professional arbitrator makes a decision about financial matters.  It is quicker than going through the court process and completely private.  It can however be expensive because you are paying for the arbitrator’s service (by contrast, judges are essentially free). 

 

An arbitrator’s decision is binding on the parties and is converted into a Court Order which can be enforced. 

 

Court proceedings

 

Unfortunately in some circumstances, it is necessary to apply to court in order to conclude disagreements about financial matters.  An application of this kind commits both parties to a strict court timetable and all financial information has to be produced.

 

At the first court hearing, the Judge will set a timetable regarding the provision of any missing financial information.  This could for example include bank statements, sets of company accounts or a report from a pension specialist.  It is open to both of the parties, if they agree, to use this first hearing to try and resolve all issues between them. However they could only do that if satisfied with the information and supporting documentation disclosed. If the first hearing does result in an overall agreement being reached, then an Order can be prepared and made legally binding by the court.

 

If the matter does not conclude at the first hearing, the parties will need to attend a Financial Dispute Resolution Appointment (FDRA).  The FDRA is used for “discussion and negotiation”.  The Judge will use his best endeavours to facilitate an overall agreement, often by expressing a view upon what either of the parties is seeking. If at that stage an agreement can be reached then the Judge can make an Order in the terms of the agreement.  However, the court cannot at this stage impose an Order upon one of the parties if that party is not happy with what is being proposed.  If the parties are still not able to come to an agreement at this point in time, then a final hearing will need to take place.  This can be many months in the future. 

 

At the final hearing the Judge will hear evidence from both parties and then make a decision as to how the money and assets will be divided and what maintenance, if any, is to be paid.  Often the outcome is a result with which neither party is terribly happy. However, because the parties have been unable to reach agreement, the Judge’s decision will stand.

 

For more information please contact:
Bells Solicitors Limited.   Registered in England and Wales no. 07827988.   Authorised and regulated by the Solicitors Regulation Authority.   SRA number 569030.   VAT registration number 137595285