Resolving Financial Matters After A Relationship Breakdown

For reasons of public policy, the court encourages people to settle their matrimonial disputes amicably. It is therefore possible to submit an agreed consent order to the court for approval without needing to attend. However, the court will not simply rubber stamp any agreement that is reached, as it retains a discretionary role. The court will therefore consider whether the agreement represents a fair and proper financial provision for the parties in the circumstances of the case.

Do I have to go to court?

There are alternatives to going to Court. Because the Court has a wide discretion in applying the law, it can be better to agree your own arrangements where possible and avoid the delay and uncertainty of court proceedings. The options are:

• Discussions between yourselves;
• Negotiations through a solicitor with or without full financial disclosure (please note that a solicitor’s ability to advise you as to whether an agreement is fair without full financial disclosure, will be based solely on the information you provide us and as such may not be fully accurate);
• Mediation; and
• As a last resort, make an application to the court.

What is Mediation?

Family mediation is a process which can be used to resolve disputes that arise before, during or after the breakdown of a family relationship. It can also be used before, during and after Court proceedings. It enables parties to communicate their concerns and needs. The role of the mediator, who is an independent and impartial third party, is to facilitate discussion between the two parties so they can come to an agreement on what to do with things such as financial or children arrangements.

Mediation is not counselling, it does not aim to reconcile couples and it does not include legal advice.

Mediation services can sometimes help couples to reach an agreement on key issues but we will still need to advise you on the implications of any agreement and convert it into an Order which will be recognised and enforceable by the courts. It may also be possible for an agreement to be reached through solicitors’ correspondence.

What information will I need to disclose if there is to be disclosure through solicitors or court proceedings?

It is extremely important to be open and honest in all dealings. Failure to be open and honest is likely to lead to reduced trust between the parties which will make constructive and non confrontational dialogue more difficult and settlement less possible. You will usually need to provide the following:

• A valuation of the former matrimonial home and any other properties that you own;
• A recent mortgage statement for the former matrimonial home and any other properties;
• Bank / Building Society / Savings account statements for each account that you hold for the last 12 months;
• Details of any investments that you may have;
• Details of any life insurance policies that you have;
• A copy of business accounts for the last two years (if applicable);
• Pension rights – a Cash Equivalent Transfer Value (CETV) for each pension provision that you hold;
• Your P60 for the last financial year;
• Your last three months payslips for each employment that you have;
• If you are self employed, a copy of your last tax return or self assessment.

What happens if proceedings do need to be issued at court?

The current procedure for financial provision is designed to encourage openness and to prevent delay. At the heart of the process is a framework to ensure that disclosure is given in an orderly, standardised format with strict timetabling fixed by the court. The emphasis is upon identifying the issues at an early stage and upon the court regulating the extent of disclosure so that it is proportionate to the issues in question and the amount at stake.

If an application is made for the Court to decide on the division of property or assets, the Court will impose a timetable and you may be advised to issue an application to ensure that negotiations do not drag on for too long.

After your application has been issued you and your spouse will be required to:

• Complete a Form E which is a document setting out all of your financial details;
• Produce copies of documents such as bank statements, pay slips, valuations and accounts as set out above.

The Court will then fix a first appointment before a District Judge. The District Judge will identify the issues between you and make directions to deal with issues such as the valuation of assets or other information that may be required.

There will then be a hearing called a Financial Dispute Resolution (FDR) appointment. At this hearing:

• Both you and your spouse attend this court hearing with your solicitors and a District Judge to see whether it is possible to settle the dispute;
• The Judge will give guidance to assist the couple to reach agreement, often indicating what he/she thinks would be a reasonable outcome. If it is not possible to settle, a final hearing will be listed to take place at a later date and the final hearing will be heard by a different Judge who has no knowledge of the case;
• At any time before the final hearing it is possible to reach an agreement and submit a note of that agreement, called a Consent Order, to the Judge for approval.

Please note that even once court proceedings have begun, the Judge will expect attempts at settlement to continue throughout the proceedings.

What factors will the court consider before making an order?

The law in this area is very flexible so that courts can achieve fairness depending on the individual circumstances of each case. There is no fixed formula, but the main piece of legislation (The Matrimonial Causes Act 1973 / The Civil Partnership Act 2004) sets out the factors to be considered in deciding what is fair. These same factors will need to be considered when trying to reach an agreement and how important each factor is will vary from case to case.  The factors are as follows:

• The welfare of any children of the family (always the Court’s first consideration);
• Income, earning capacity, property and resources of each person now and in the foreseeable future;
• Financial needs, obligations and responsibilities of each person now and in the foreseeable future;
• The standard of living enjoyed by the family before the breakdown of the marriage or partnership;
• The age of each person and the duration of the marriage or partnership;
• The contribution made by each person to the welfare of the family, including looking after the home and bringing up children;
• The conduct of each person, but only if it is so bad that it would be unfair to ignore it;
• Physical or mental disability;
• Any benefit lost because of the divorce or dissolution (in practice this is restricted to loss of pension benefits).

What types of orders can be made?

There are nine different orders that can be made. They include:

• Maintenance;
• Periodical payments;
• A lump sum order;
• A property adjustment order including a sale or transfer of the property;
• Pension sharing / pension attachment order.

What is a clean break?

A clean break will end the financial relationship between you and your partner. Even if there are no assets of the marriage, we would still recommend that a clean break consent Order is drawn up to dismiss all future financial claims between you and your spouse.

Are there any time limits on bringing an application?

The court has jurisdiction to make the orders set out above at any point on or after the pronouncement of a decree nisi or conditional order.

There is no time limitation period for bringing an application. However, the court has no jurisdiction to make orders in favour of a party who has remarried or entered into a civil partnership unless the application is made before the marriage / civil partnership. 

Please note that this article refers to general principles and does not constitute tailored legal advice. Every case is different and there is no substitute for individual legal advice – please contact us for expert advice specific to your case.