Financial Divorce Settlements

When you agree financial matters upon divorce you will need a consent order to be drafted by a family law solicitor incorporating the terms of the agreement, which is then submitted to the Court for approval. If you come to a direct agreement without specialist legal advice there may be some financial matters which you have not considered, or indeed agreed upon, and as such you might not have a comprehensive agreement. We will advise and guide you on reaching a comprehensive financial agreement and will ensure that the Consent Order fully detailed such that it is approved by the Court.

When sending the consent order to the Court you will also need to submit a form known as a Statement of Information (D81) outlining the financial position both before and after the order being made, which must be accurate. You will be asked to provide a schedule of the value of assets and liabilities (including equity in property and pension valuations) whether in joint or sole names. The Consent Order and Statement of Information are both sent to the Court for approval by the Judge with the Court fee of £53. The Consent Order cannot be filed with the Court until after the Conditional Order is pronounced and importantly the Court will not accept the Consent Order without the statement of information.

A Judge will consider the Consent Order and Statement of Information and if satisfied that all is in order and that it represents a ‘fair’ settlement the Consent Order will be approved and sealed by the Court making it a final Order and legally binding. The Judge does have the power to refuse to make an Order, although this rarely happens if the order is drafted by a solicitor and reflects a fair settlement. If on the face of the paperwork the agreement appears essentially unfair the Judge may ask questions or even request a hearing to justify the reasoning behind the agreement.

All of our Family Lawyers are members of Resolution and will provide proactive, child focussed advice and solutions, without the need for court proceedings where possible.

Our Family Law Solicitors will work with you to decide on the best approach reaching agreement on all issues, ensuring that the best interests of any children involved are the priority. The Court option is rarely the best way of resolving family matters and there are many dispute resolution options to be considered which do not involve the Court process. Mediation, Collaborative Practice, HFLS, Arbitration, Resolution Together, round table meetings, solicitor negotiation, Earley Neutral Evaluations (ENE’s) and Private FDR’s are just some ways of resolving family issues in a much more constructive, amicable and cost effective way. We will help you decide on the most suitable approach for you, and most importantly we will agree on next steps and how to progress matters in the most positive way for you.

If financial matters are not capable of agreement then it may become necessary to issue court proceedings for financial orders to be made so that a Judge may decide on what should happen with regards to the couple’s finances. If the matter proceeds to a final hearing then the interval between filing the original application and the final hearing may be in the region of 12 – 18 months or more.

Under the court rules there are various stages where the control of the procedure is in the hands of the court. It is important to remember that each stage can be avoided if prior agreement or settlement of claims is reached.

• The process begins by sending a ‘form A’ to the court to issue
• The court will then give a date of the first court hearing known as the ‘First Directions Appointment’ (FDA)
• Before the FDA, both husband and wife must provide full details of their capital income, assets, liabilities and any other relevant financial information in a prescribed form called ‘form E’. This form is both important and complex and should be completed by a specialist divorce solicitor. It is essential that full and frank financial disclosure is provided

The couple and their legal advisors should attend this hearing unless excused from doing so by the court. The Judge will set out an agenda to include a timescale within which any additional financial questions must be answered and any valuations must be agreed or obtained for certain assets such as property, businesses or pensions. The Judge will also consider whether any other evidence is required to enable effective negotiations between the couple. This agenda will be set out in a court order and will include a date for a ‘Financial Dispute Resolution’ (‘FDR) Appointment often 3 – 4 months later.

As with the FDA this hearing must be attended by both parties and their legal advisors who must all arrive at least one hour before the hearing so that negotiations can be attempted before the hearing. The FDR will be conducted by a Judge who will have copies of all offers for settlement which have been made and all evidence which has been filed with the Court. There is a duty of on-going disclosure and therefore further updating financial information will be required to ensure that an accurate schedule of assets and income can be produced. The purpose of the FDR is to see if it is possible to come to an overall financial settlement. Frequently but not always this objective is achieved, and the Judge can then make a final order which once complied with means that the case has been concluded. At FDR a Judge will be invited to give an indication as to the likely outcome of the case if it were to proceed to Final Hearing. This can be an invaluable tool to assist settlement. If no agreement is reached the case will be listed for a final hearing 4-6 months (or more) later.

At the final hearing the Judge will hear evidence from both husband and wife in a witness box and decide on the appropriate financial order. The Judge will ask specific questions about each party’s financial dealings. The final order may or may not be in line with what one spouse was seeking. This hearing usually lasts at least 1 day or more.

When making a financial order upon divorce the Court will take various matters into account. The Court considers all the circumstances of a case, and in particular the Court has regard to the following matters::

1. the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire;
2. the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
3. the standard of living enjoyed by the family before the breakdown of the marriage;
4. the age of each party to the marriage and the duration of the marriage;
5. any physical or mental disability of either of the parties to the marriage;
6. the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;
7. the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it;
8. in the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring (most usually pension provision).

The aim of the Court is to achieve fairness. Following the landmark case of White v White [2000] the Court must consider an equal division of assets built up during the marriage, unless the marriage was of short duration, or the assets are insufficient to satisfy capital needs.

At every stage of appearance at court both husband and wife must provide a schedule of costs to the court which has to be in a prescribed form – ‘Form H’. The vast majority of cases are settled and never go to a final hearing. There is a general costs rule that each party will bear their own legal costs unless there is strong evidence that one party has behaved inappropriately within the court proceedings such as hiding assets or not fully disclosing financial information.

We hope this is helpful as an overview – it is only an overview however and we will advise you along the way in relation to more detailed aspects of each stage and your particular case and circumstances as necessary.

For specialist advice in all areas of Family Law, please call us on 02380 713 060, or email [email protected].