Surviving financial settlement on divorce: an introduction

surviving financial settlement on divorce an introduction

Financial Remedy: Surviving Financial Settlement on Divorce When individuals come to us intending to divorce from their spouses or civil partners often their primary concern is what will happen to their finances. When one household becomes two there can often be disagreement about who gets what and where these disagreements cannot be resolved, the court is the ultimate decision maker.

What is a financial remedy?

The court has the power to make a wide range of orders. The following are the most common: ●

An order for periodical payments which is an order for one party to pay maintenance on a regular basis to the other

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An order for lump sum provision which is an order for one party to make a lump sum payment to the other

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A property adjustment order which is an order for one party’s interest in a property to be transferred to the other, not necessarily in return for payment

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A pension sharing order which is an order for one party’s pension to be split in a certain way and transferred to the other.

Do we have to go to court?

There are numerous ways to go about coming to an agreement with your spouse regarding your financial arrangements, without having to go through the costly and time-consuming court process. For more information on these options, see our booklet . If attempts at negotiation do not result in an agreement then an application to the court by one of you is likely to be inevitable.

How does the court process work?

You can apply to the court for financial remedies once your divorce petition has been issued (no matter who originally filed for divorce), but the court cannot make such an order until the decree nisi is pronounced.

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How can we help you?

We would see you at a first meeting to ascertain the assets in your case and your lifestyle. This would include an analysis of your spouse's capital assets, pensions and income. We would advise you whether any emergency action is necessary (for example placing a ‘Matrimonial Homes Charge’ over property owned by your spouse in his or her sole name, or applying to the court for a freezing injunction). We would advise you on a preliminary basis what the court is likely to award (although this does not mean that you have to go through the court process) and your entitlement. We would then explain your various options in terms of settlement. We often suggest a Round Table Meeting once there has been full financial disclosure, but we would also explain how the court process works in more detail, should attempts at settlement be unsuccessful.

Should you decide to instruct us we can take on a strategic role and have control of the whole process, which would include detailed advice on court documents, drafting your statements, and comprehensive assistance with completing the Form E which is a very complex document. We would also prepare for the court hearings and attend these with you for support. We are able to assist you wherever the matter leads and can advise you on any issues that arise.

We are the exclusive UK member of the leading international network , and are also members of (LAW). This ensures that we have an excellent pool of experts across the world, offering local and specialist advice, if your case has international elements. One of the team is also a member of the International Academy of Matrimonial Lawyers.

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A step by step guide to the process 1

Mediation

You are required to attend a Mediation, Information and Assessment Meeting (“MIAM”) before making a formal application to the court. This requirement can be avoided if, for example, there are no mediators available within your local area, or if there is an aspect of domestic violence to your case.

Alternatively you can have a mediator certify for the court that your case is not appropriate for mediation.

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Form A

The Form A is essentially the application for a Financial Remedy (see below). It includes a list of the orders that the party is seeking and includes a certificate relating to the MIAM requirement above.

It currently costs £255 to issue the Form and once this is done the case is open and will be assigned the same case reference as the divorce proceedings.

Once the From A is issued, a first court hearing is listed (known as a First Appointment).

Form E

There is a duty on both parties to give full, frank and clear financial disclosure.

You will be required to exchange with your spouse a document called a Form E 35 days before the First Appointment hearing. The Form E includes details relating to the marriage, the children of the family and the party’s capital and income needs. The lengthiest part however relates to the financial resources of the party and, amongst other things, you are required to provide 12 months of statements for all of your bank accounts. This allows the court to assess the assets of the family. We will be able to assist you in completing this complex document.

The duty of disclosure is ongoing throughout the process, and the parties will periodically be required to update their Forms E. Parties have a duty to disclose any material changes.

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First Appointment Hearing

Within 12 and 16 weeks of the Form A being issued, the First Appointment will be heard.

This hearing is where the court will decide the timetable for the rest of the case, and put in place directions for the management of the case. The aim of this hearing is to resolve any issues arising from the Forms E so as to give the parties a firm understanding of the assets and needs of the other, which encourages early settlement. Often, the court will make directions for professional valuations of substantial assets of the parties, or it may order that any questions you have about your spouse’s Form E must be answered within a certain time frame. The next court hearing (the Financial Dispute Resolution hearing) will also be listed.

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Financial Dispute Resolution (FDR) Hearing

The FDR is similar to a court-adjudicated mediation. The parties are obliged to come to court with a proposal for settlement, and anything said at the hearing is without prejudice, which means that it cannot be used by either side at a later stage in the case. The Judge will give an indication of what is likely to happen at the Final Hearing, and will usually encourage the parties directly to come to an agreement. Often, parties come to an agreement on the day, and the Judge can make the agreed order there and then. If the parties do not, the Judge will make directions for the timetable at the Final Hearing.

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“Section 25 Statements”

If the FDR is unsuccessful and the case continues to Final Hearing, the court will consider a number of factors which include, for example, the welfare of any children of the family, the current financial resources of the parties, their needs and the length of the marriage.

Before the Final Hearing, you may be required to provide a detailed statement to the court addressing these factors, and we will be happy to draft this for you.

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Final Hearing

The Final Hearing will usually be listed for at least one day. Often you will have a barrister (sometimes called counsel) representing you. The Judge will read all the documents beforehand, and then the applicant’s barrister will make an opening speech, which will highlight and summarise their case. Sometimes the Respondent’s counsel will do the same, but not always. The court will then hear the evidence of the parties, which will invariably include cross-examination. The parties’ barristers then make closing speeches.

Judgment will either be handed down that day, or will be reserved and sent to the parties at a later date.

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Case study We recently helped a client who was divorcing her husband. He had assets worldwide and he also had property in the UK in his sole name.

The parties had been married for 30 years and had three children. The wife knew little about his financial affairs as he had always dealt with these matters. ●

We were able to place a matrimonial homes charge on the properties in his sole name to prevent him selling them from under the wife.

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We secured her interim maintenance of £6,000 per month whilst the proceedings were ongoing.

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We engaged a forensic accountant to value his businesses and following a round-table meeting we settled the case.

The wife received a lump sum settlement of £3 million which enabled her to move on with her life.

“An energetic firm with a strong and growing market presence.”

Legal 500 2015

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Family Team Services for individuals include:

Alan Kaufman Consultant T: +44 (0)20 3755 5538 E: alan.kaufman@howardkennedy.com

Lois Langton Partner T: +44 (0)20 3755 5559 E: lois.langton@howardkennedy.com

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wills and inheritance tax planning

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efficient administration of estates

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creation and administration of trusts and charities

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trust and estate dispute resolution

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marriage and cohabitation (pre-nups/postnups/cohabitation agreements)

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relationship breakdown (divorce/civil partnerships dissolution and financial settlement)

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our specialist children’s unit dealing with residence and contact, adoption and surrogacy, international child abduction and children disputes

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residential property

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employment law advice

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reputation management and defamation

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personal injury

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immigration

Michele Freyne Partner T: +44 (0)20 3755 5463 E: michele.freyne@howardkennedy.com

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No.1 London Bridge London SE1 9BG DX 144370 Southwark 4 Tel: +44 (0)20 3755 6000 Fax: +44 (0)20 3650 7000 www.howardkennedy.com