Aside from arrangements for children, the area that often causes difficulties and animosity in divorce proceedings is the financial settlement.
Although a financial settlement can be worked out between you and your spouse or partner independently, without the advice of a lawyer, this is a risky and dangerous move, especially if you are the weaker party financially or you feel that you were to blame for the break up.
With our expert legal guidance, we will ensure that you protect not only your financial future, but the future of your children.
CLIENT GUIDE TO FINANCIAL PROCEEDINGS
The purpose of this guide is to explain the orders that can be made by the Court upon marriage breakdown, the matters which the court would consider and the procedure which will be applied.
The Financial Remedy Orders that a Court can make fall into two main categories: income orders and capital orders.
Income orders are commonly known as maintenance orders. Their purpose is to provide the recipient with regular financial support either in the short term or in the long term.
The capital orders are lump sum orders, property adjustment orders, orders for sale of property and pension sharing orders. The purpose of these orders is to settle any disputes in respect of the couple's capital once and for all. A lump sum order and a property adjustment order can be made either for a spouse and/or a child.
Any of these orders can be applied for as soon as a petition has been filed. An order cannot be made until after Decree Nisi has been pronounced and will not take effect until Decree Absolute. The only exception to this is maintenance pending suit. However, an order for the benefit of a child can be heard at any time and the order takes effect immediately.
The Court has a great deal of discretion and flexibility when deciding on the division of assets. It is required to have regard to all of the circumstances of the case. First consideration must, however, be given to any children of the family under 18. There is a non-exclusive list of factors to be taken into account. None of these factors have priority. They are:
- The income, earning capacity, property and other financial resources which each of the parties has or is likely to have in the foreseeable future, including any increase in earning capacity which it would in the opinion of the court be reasonable to expect a party to take steps to acquire.
- The financial needs, obligations and responsibilities which each party has or is likely to have in the foreseeable future.
- The standard of living enjoyed by the family before the breakdown of the marriage.
- The age of each party and the duration of the marriage.
- Any physical and mental disability of either of the parties.
- The contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family.
- The conduct of each of the parties if that conduct is something that it would be inappropriate for the Court to disregard.
- The value of any benefit which by reason of the dissolution of the marriage a party will lose the chance of acquiring.
When considering the appropriate division of capital assets the Court are required to apply an equality test. The objective of the Court is to achieve a fair outcome for both parties and as a general rule, equality should only be departed from if there is good reason.
In considering what would be an appropriate spousal maintenance order, the Court must consider the needs of both parties, and the resources available.
Child maintenance is now largely dealt with by the Child Maintenance Service if parties are unable to agree a Family Based Arrangement. If the parties agree the amount of any child maintenance, the Court can make an order for the agreed sum.
The divorce petition will contain details of all the financial claims that can be made. In order to proceed with any of those claims the party applying must file an application with the court "Form A". This is a simple form which sets out the orders the Court is being asked to make. A fee of £255 is payable.
Upon receipt of the Form A the Court will fix a First Directions Appointment and will give 12-16 weeks notice to each party.
Before the First Directions Appointment both parties must file a Financial Statement "Form E" with the Court and the other party, providing details of their capital, income, pensions and liabilities together with documentary evidence to support the same. There is a duty for both parties to be open and honest and to provide full and frank information.
First Directions Appointment (FDA)
The purpose of this hearing is for the Court to consider all the financial information that has been filed by the parties, and to give any further directions that are necessary to ensure that the matter is ready for a hearing. Valuations of property or other expert reports can be ordered if necessary. At the FDA the Court will also set a hearing date for a Financial Dispute Resolution Hearing, unless they consider this is not appropriate.
Financial Dispute Resolution Hearing (FDR)
The aim of the FDR is to produce a settlement. Both parties and their solicitors must attend. The FDR will be conducted by a District Judge who will then have no more to do with the case. The District Judge will attempt to help the parties towards settlement by exploring common ground.
Any offers made to settle the case from either party can be referred to at the FDR. However, all discussions at the FDR are completely privileged. This means they cannot be referred to should matters need to go on to a final hearing.
If a settlement is reached at the FDR, the District Judge can make a Consent Order reflecting the agreement reached. The District Judge can also adjourn the FDR to allow one or both parties' time to consider their position.
If no agreement can be reached at the FDR, the District Judge can make a further directions order and set the matter down for a Final Hearing. Both parties must send a statement to the Court and each other setting out the final order they want the Court to make.
The Final Hearing is usually before a District Judge and it is held in private. During the course of the hearing both parties are likely to be required to give evidence on oath and be cross examined by the other party's legal representative. At the end of the hearing, the District Judge will make a Final Order.
Offers to Settle
Offers to settle are an important part of negotiating financial arrangements. Either party may at any time make a written offer to settle which is "without prejudice". It is a means of putting pressure on the other party to settle. Such an offer will not be disclosed to the Court, except at the FDR. The presumption in financial proceedings is that each party will pay their own costs, except in very limited circumstances. Your legal representative will advise you as to the implications of any cost orders being made during the proceedings.
If an agreement is reached without the need for matters to be referred to the Court or during Court proceedings at any time prior to a Final Hearing, that agreement can be incorporated into a Consent Order.
A draft order will usually be prepared by the Applicant's solicitors. To enable the Court to have details of the parties' circumstances, if a Form E has not been filed, it will require a very brief statement completed by both parties and disclosed to each other, a "Statement of Information" which contains a summary of the parties' financial situations and some personal details. The Consent Order and the Statement of Information are then lodged with the Court. There is a Court fee of £50 payable unless presented to court at one of the hearings. A District Judge will consider the documents and if satisfied that the order is fair on the information supplied, will make an Order in the agreed terms. The court can ask questions or ask the parties to attend a short hearing before deciding whether to grant the Order requested.
This guide is intended as an outline only of the procedure. It is NOT intended as a substitute for proper legal advice. Each case is different and advice cannot be given without a proper analysis of your own circumstances. For further advice and information please contact any member of the Family Team at Andrew & Co.
Download our Financial Proceedings Guide
The family law team at Andrew & Co Solicitors understands the stress, worry and sometimes anger that divorce can cause, especially surrounding the areas of income, property and pensions. Led by Julie Bailey, our family lawyers are committed to resolving disputes around financial settlements away from the courtroom. We are experienced in working collaboratively, negotiation and mediation, and will exhaust these methods before committing our client to the litigation process.
In cases involving domestic abuse or where your spouse or partner is unwilling to cooperate in providing information or documentation, negotiation and mediation may not be appropriate. If you are in this situation, we can assure you that not only are we fully experienced in family court proceedings and fighting for our clients’ best interests; we also understand how vulnerable some clients are. Therefore, our solicitors deal with each case with empathy and sensitivity and will keep you fully informed about how your case is progressing.
The best results
Our family law team is committed to delivering the best results for our clients, as we know that the decisions you make now will affect your financial future for many years to come. You can be confident of receiving clear, concise advice in a timely manner – we always reply to our clients promptly and you will have the direct dial and email address of your solicitor so you can contact them at any time during business hours.
To make an appointment with one of our family team to discuss a financial settlement, please call our Newark office on 01636 673743 or our Lincoln office on 01522 512123.