Financial matters are often an area after separation and divorce where if matters go to court, large sums of money are spent by one or both parties on lawyers which are disproportionate to the actual assets involved. Assets are often swallowed up in lawyer fees leaving very much smaller monies to be distributed between the parties. It is generally far better to come to a mutually agreed financial settlement which can be put into a Consent Order which is signed by both parties and then sent to the court to be signed by the Judge. This becomes a legally binding document.

To reach a mutually agreed financial settlement then a suitable independent and impartial mediator is a good option and/or if both parties have good lawyers then they can assist. Collaborative processes and family law arbitration are also other possible options that you may wish to consider. At any stage it is often helpful to get information from our McKenzie Friends who will give you straightforward realistic information on the options and likelihood of success in your choices.

If there is not able to be a mutually agreed financial settlement between the parties then the next step is usually an application to the court by one or both parties. A Form A application is filed with the court with the accompanying fee and a timetable will be provided by the court to the parties requiring them to adhere to providing certain documents, the primary document being a Form E.

At the first hearing after both parties have already filed their Form E with the court, questionnaires may have been raised on the parties completed Form E which will be scrutinised by the judge. Other directions such as a property valuer report may be directed by the court for example. The short hearing will result in directions for the parties to follow.

The next hearing is called the FDR hearing and it may be a rather longer hearing than the first. Submissions (views) of the parties will be heard and the judge will inform the parties how s/he believes the likely outcome will be if this was to go to a further hearing (final hearing). On the basis of that indication from the judge of what s/he believes may be the outcome the parties are able to then negotiate and try to come to a settlement based around what the judge has suggested. If an agreement is reached then it becomes a Consent Order.

If no agreement is reached at the FDR hearing then it will go forward to a final hearing where a day or two in court is not unusual and where oral evidence is heard and both parties may be cross-examined. It is obviously far better to avoid this if possible as the costs if you have lawyers involved can be enormous.

At any time during the process from filing a Form A application to the final hearing there is scope for the parties to come to an agreement By Consent which is generally the better way to proceed in terms of cost, time and stress. Our McKenzie Friends will give you information that helps you decide quickly and be well informed as to whether it is worth making certain compromises to reach an agreement or whether the proposals being put forward are not realistic and it is better to proceed with the court process.

The court’s overriding duty is to ensure that the outcome is fair although that may not necessarily mean the assets will be divided equally. Factors such as the length of marriage or civil partnership, ages and health of the parties, existing and potential income and capital, needs of the parties and their children and contributions will all be taken into account in how the court determines the fairest way as they see it in dividing the assets. They are the Section 25 factors within the Matrimonial Causes Act 1973.

Please note the court can make an Order about finances only when the Decree Nisi stage or Civil Partnership Dissolution has reached the Conditional Order stage. Financial Orders are not enforceable until the Decree Absolute, or Final Order (Dissolution).

Maintenance Pending Suit is where under Section 22 of the Matrimonial Causes Act 1973, the court may order one spouse to pay maintenance to the other ‘pending suit’ (i.e. until decree absolute), in such sum “as the court thinks reasonable”. It may be backdated to the date that a petition for divorce, nullity or judicial separation was presented. Equivalent provisions exist under the CPA 2004 for civil partners and under Schedule 1 of the Children Act 1989 for unmarried parties.

It is not only those who have been or who are married/civil partnership who may face court proceedings in financial matters. Those parents with children between them may apply for or receive a Schedule 1 to the Children Act 1989 application where children’s financial needs will be looked at carefully by the courts if an application is made. This is an area where we have McKenzie Friends with experience and knowledge of such matters.

Cohabiting or former cohabiting couples do not have access to the financial remedy process as parties who are married. Cohabitants are reliant on the principles of land and trust law to determine any dispute regarding property. Cohabitation agreements are possible but difficult to rely on unless they comply with the essentials of contract law.