Financial Remedies on Divorce Solicitors

Once you have commenced divorce proceedings you can ask the court to consider your claims for financial remedies, although a final order can only be made by the court once decree nisi has been pronounced.

There is a wide range of orders available to the court in financial remedy proceedings, dealing with the family home, pensions, capital, personal property and income (maintenance). Note however that the court has no power to make orders about child maintenance unless this is agreed upon by the parties. If there is no agreement, child maintenance has to be assessed by the Child Maintenance Service.

There are a number of statutory factors which the court must take into account in determining an application for a financial remedy, which are set out in section 25(2) of the Matrimonial Causes Act 1973, and which are as follows:

(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.

Although these factors are notionally of equal importance in very many cases the question of need will predominate, largely because of the high cost of housing in the UK. If one party has a greater capacity to borrow, and to repay mortgage debt they may be awarded less capital if the other party would struggle to rehouse otherwise (especially if they have children to look after).

Since White v White [2000] UKHL 54 the courts have taken the view that once the parties’ needs have been met the court should strive to achieve an equal division of capital between divorcing couples (except where the marriage has been very short).

Section 25A Matrimonial Causes Act 1973 requires the court to promote a Clean Break, terminating the parties’ financial dependence upon one another wherever possible.

Procedure

If you can negotiate a fair division of financial assets then your solicitor can draft a consent order reflecting the terms agreed upon, which can be considered by the court and if approved it will become binding upon the parties. If you can’t agree and you ask the court to deal with the matter you will need to exchange comprehensive financial information in standard form called Form E. Once you have done so your case will be listed for a First Directions Appointment, where the judge will deal with any questionnaires that the parties have raised, and if necessary give directions for the valuation of assets. The case will then be fixed for a Financial Dispute Resolution hearing, where the parties will put forward their proposals for settlement to the judge. At this stage the court cannot impose an outcome upon the parties, but he or she will express a view as to what they consider to be a fair division of assets, and encourage negotiation. Most cases settle at this stage, or soon after. Only if the parties still can’t agree does the case go to a Final Hearing, where the judge decides what will happen.

FAQs

If you’re confident about the existence of an asset which hasn’t been disclosed, say money from an inheritance, or an expensive item like a car or a piece of jewellery you can ask about it in your questionnaire which the judge will consider at the First Directions Appointment. If the judge thinks the question is fair, your spouse will have to answer it. However, if you have only a suspicion that something is not right, it is much more difficult as the court won’t approve questions which are too vague or wide ranging. Your solicitor will scrutinise the papers that your spouse provides with Form E carefully, particularly bank statements, to get a clear understanding of your spouse’s financial affairs, so they should be able to recognise if there’s something missing.

You should be provided with all of your spouse’s relevant financial information before the First Directions Appointment, if not, you can ask the judge for an order for the missing papers to be disclosed. What you cannot do is secretly copy private papers belonging to your spouse, and if you give them to your solicitor he or she wouldn’t be allowed to look at them.

It depends whether or not you can agree. If you can’t, you will need to go to court with your solicitor or barrister so that the court can decide what is best, although it is rare for divorcing couples to have to give evidence in front of the court.

Section 25(1) Matrimonial Causes Act 1973 makes it clear that the welfare of dependent children is the first consideration of the court, so if you can’t afford to rehouse yourself with the children if the family home was sold then the court may postpone the sale until the children grow up, and allow you to continue living in the house. But this is rarely a good outcome for either party as your spouse won’t be able to access his or her capital and may not be able to get a new mortgage. Although you will have security for now you’ll have to sell once the children grow up, and any improvements you make to the property will benefit your spouse as well as you of course. So it’s usually better to agree a Clean Break.

The conduct of the parties during the marriage is one of the factors that the court must take into account in Financial Remedy Proceedings but only if it would be inequitable to disregard it. The courts have interpreted this to mean that only the very worst type of behaviour will be considered.  Gross financial mismanagement is sometimes recognised as a relevant factor by the court, where for example a party has squandered assets of the marriage because of addiction.

Yes, absolutely. After the family home the parties’ pensions are usually the next most valuable asset, and the courts are very used to making orders for them to be shared. It is mandatory for the parties to exchange pension valuations in advance of the First Directions Appointment.

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