Stuart Barton (Head of Department) and Paula Fraser
The most challenging aspect of any separation or divorce is how the assets of the parties should be divided between them. Each party inevitably has their own ideas over the best way to achieve a settlement. One party may be determined to sell the family home. The other may want it transferred into their sole name. At all times the parties should keep their dispute in proportion. Spending thousands of pounds arguing when the assets of the marriage are limited is no good to anyone.
Reaching a financial settlement is essentially a three stage process leading to an agreement between the parties. The three stages are:
This involves identifying the assets of the marriage, both in joint names and sole names. All assets, however they are held, are potentially available for division between the parties.
This is to put accurate valuations and figures on each of the assets. The parties should disclose to one other documentary evidence to support those values. This is known as financial disclosure.
The final stage is the application of the law to see how the assets should be divided. It must be noted that the court has great flexibility over how assets are divided upon divorce. This flexibility allows for creative solutions. However, it can also lean towards unpredictable outcomes.
Approach of the court
Contrary to speculation, the court does not automatically favour wives nor penalise husbands. Each divorce is unique and must be assessed on its own facts. In all cases though, the position of any minor children of the family is the court’s first consideration. Thereafter, the following factors must always be considered:
a. the income, earning capacity, property and other financial resources of each of the parties to the marriage;
b. the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
c. the standard of living enjoyed by the family before the breakdown of the marriage;
d. the age of each party to the marriage and the duration of the marriage;
e. any physical or mental disability of either party to the marriage;
f. 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;
g. 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;
h. the value to each of the parties of the marriage of any benefit, which, by dissolution of the marriage, that party would lose the chance of acquiring.
Alternative Dispute Resolution (ADR)
It must be said that there are generally far better ways of resolving financial matters than making an application to the court. There are a variety of methods available to assist the parties in resolving matters without the need to apply at court:
• Direct discussion between the parties
• Negotiation between solicitors
• Round table meetings with the parties and their solicitors
• Collaborative Law
Mediation is usually now a compulsory step before any court application is made. This does not mean that the parties must mediate but there must be consideration given over whether it is a suitable means of resolving matters. Most cases are inherently suitable for mediation or other forms of ADR.
Applying to the court
If an agreement cannot be reached through ADR, court proceedings can be started. The initial procedure is as follows:
1. A simple application form is lodged at court along with the court fee (currently £255) and the court will allocate a First Directions Appointment (FDA).
2. Prior to the FDA, the parties must complete a Financial Statement or Form E. The Form E provides full details of their income, assets and liabilities. Once both parties have prepared their Form Es, an exchange of them takes place.
3. Once Form Es has been exchanged, consideration can be made as to any further documents/information that are needed.
Both parties should attend this hearing along with their legal representatives. The District Judge dealing with the hearing will address the following:
1. What further information/documentation each party must produce.
2. Whether any expert evidence is needed, such as a valuation for the family home or a pension report.
3. If a settlement is agreed, make a final order.
4. If no settlement is agreed, list the case for a second hearing. This is usually known as a Financial Dispute Resolution hearing (FDR).
The objective of the FDR is to try and settle the case. It is not a formal court hearing but a meeting for negotiation purposes. The District Judge will consider any settlement offers made and try to assist the parties by suggesting what a likely outcome would be if the case were to proceed to a final hearing. A large number of cases settle at or before this stage. If the case does not settle, the court will list the case for a final hearing in due course.
This will be before a different District Judge to that who dealt with the FDR hearing. If it still proves impossible to negotiate a settlement, each party can submit their case to the Judge and be questioned about their case by the other party. Once evidence or submissions have been given, the Judge will make an order.
It is hard to predict exactly how long a case will last. As a very general guide, if a case does proceed to a final hearing, it will usually finish some 6 to 9 months after it starts. Cases can and do take longer than this, particularly if there are complex issues involved.