Divorce

When couples separate and divorce, they often have to try and unravel their financial affairs, which in some cases can have been tied together for many years.

There are many “urban myths” around finances and divorce, and the reality is that each case is judged on its own facts.

MEDIATION

To get a case to Court, a couple have to have attended a Mediation Information and Assessment Meeting (MIAM). The person who wants to initiate the discussions would have to contact a local mediator, who would set up (usually) a separate appointment for both spouses. The mediator will use this opportunity to explain to each spouse about how mediation can help them resolve issues. The mediator will also explain how mediation works. The mediator will also assess if the case is suitable for mediation. If it is, the mediator will set up a joint meeting. At that meeting it’s really important for couples to bring as much financial documentation with them as possible, for the meeting to be of benefit to them both. The mediator will then work through each of the assets, and liabilities, so the couple have a picture of what assets they have available, and what debts need to be met. The mediator will then assist them in trying to reach a mutual settlement. This takes work and compromise on both sides and can be really difficult for both. However, it is worth it. It takes far less time, and costs far less money.

Frequently Asked Questions

You do not have to have a solicitor, but it is recommended that you obtain some legal advice throughout the process. Financial applications can be complex, and it is strongly recommended that you seek advice, but you can conduct the proceedings on your own.

This depends very much upon the circumstances of the case. If it is possible that mediation will assist you, generally such cases take approximately 3 or 4 months, but could take less time, or longer depending upon the complexity of the case, and finances involved. If the case is going to go to court, from the date of issue, it will be 3 months before the first appointment. Again, the average time is around a year if it goes from issue up to a final hearing, but it could take longer or less time depending upon the availability of Judges, the complexity of the finances, how quick each person is to respond to orders etc.

Costs vary significantly, depending upon where you live, what assets you have, and how co-operative the other person is. Financial proceedings are costly, so it is better if you can agree between you.

They can be found  at HM Courts & Tribunals Service click here to access information.

The Court has a choice of four ways in which to deal with pensions:-

  1. Do nothing
  2. Making a pension sharing order, which means that the pension company would have to pay a specified percentage of the pension to the other person. That person would need the advice of a financial adviser, as pensions is a difficult area, and that sort of advice is outside the remit of a solicitor.
  3. Making a pension attachment order – this is where part of one person’s pension is, at the point of pay, sent by the pension company to the other person.
  4. Offsetting the other assets against the pension – this means that one person may get more of the other assets, if the pension of the other is left in tact.

Both pension sharing and pension attachment orders cost money. The cost varies from pension company to pension company, but is usually around about £750 to £1,000.

Under s.25 Matrimonial Causes Act 1973, the Court has to take into account the following:-

(a)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;

(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 of the parties 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)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

In most cases the Court are looking predominantly at what most people need and they work back from there.

The Court will only tend to take conduct into account when it is financial conduct that it can not overlook, or when the behaviour is so bad it would be “inequitable” of the Court to disregard it. In terms of financial conduct, the sort of example where a court may take the conduct into account is where one person, after separation, has built up a large overdraft on a joint account, with the sole purpose of the other person having to pay it back. In terms of other conduct, this has to be really extreme, and is very rarely granted. This can be very difficult for people to come to terms with, but the purpose of the Court in sorting out finances is not to punish, but to try and decide what is fair, and what both people can live with.

Most firms of solicitors do offer fixed fee packages now. However, it is up to the solicitor to decide if this is a case that is suitable for a fixed fee package. Whilst fixed fee packages mean that people know exactly what the cost is, the fixed fee is normally for a set piece of work, and that does not mean that the solicitor will carry on acting under that fixed fee, once the work has been done. In addition, people need to think about the sort of service that they want. If you want to pick up the phone to the solicitor when you have a problem, or seek reassurance regularly, fixed fees may not be for you. Please discuss this with your solicitor when you go in for your appointment.

For those cases that are not suitable for mediation, or where one person hasn’t turned up to their meeting, the mediator will sign a Form A to say that mediator is not suitable. The Court will not issue a financial application without it being signed off by a mediator, except in exceptional circumstances.

The Form A then has to be completed and sent off to the court with a court fee of £255 (unless the Applicant can show that they are entitled to a fee exemption, by completing a form EX160 and supplying the supporting financial documentation). The Form A has to be issued within the divorce proceedings, which means that the divorce case number has to be inserted into the form.

The Court will then issue standard directions, and give the first court date in 3 months time. The standard directions are that the couple must both file and serve Forms E within 6 weeks, they must file an up to date chronology, statement of issues, and a questionnaire of any questions they want to ask of the other person. The Form E is a really detailed financial document and requires a lot of supporting documentation, including 12 months bank statements of any account in the name of the person completing the form, up to date mortgage statements, copies of any house valuations, up to date Cash Equivalent Transfer Values (CETVs) in respect of pensions, most recent P60s, copy loan agreements, credit card statements etc. The work to complete the Form E really needs to have started before the application is filed.

At the first directions appointment, the Court usually gives directions for the future of the case. For example, if a couple can not agree on a valuation of a property, the Court can order a joint valuation at joint expense. If one person is alleging that ill health prevents them from working, the Court can order the GP to file a medical report to confirm the person’s health and prognosis.

Sometimes the hearing can be used as an FDR. Generally the FDR is set up for another date. The FDR is a Financial Dispute Resolution appointment. At this appointment, the couple set out their case, without giving evidence. If they have solicitors, the solicitors will speak for them. The Judge also has access to all offers exchanged in the case. The Judge will then give an indication as to the type of order that Judge would make in the case. This is to enable a couple to try and agree matters, without the expense and stress of a contested hearing. That Judge is prevented for dealing with the case any further – it’s passed to another Judge who won’t have access to the exchange of offers.

A contested hearing is where the Court sets aside time to allow the Judge to hear fully from each person. They may hear from other witnesses if they are appropriate. After hearing all the evidence, the Judge will then give judgment. This is where the Judge goes through the evidence, says which evidence they prefer, and then makes an order.

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