The technical name for financial proceedings in divorce or judicial separation is called ‘Ancillary Relief'.

It is our intention to put your case as effectively as possible whilst trying to achieve a fair and reasonable settlement for you as quickly, efficiently and cheaply as possible.

Any financial settlement or agreement reached should be embodied in a consent Order approved by the Court so as to be binding both now and in the long term.

Mediation

In recent years the Government has supported and developed schemes for mediation which offer an alternative way of resolving differences between people involving children matters. If both parties agree to be referred for mediation, then any Court proceedings can be put on hold until the mediation option has been fully considered. Mediation is where a trained mediator uses his/her skills to encourage the parties to reach a settlement between them which reflects both parties needs, interests and responsibilities and of course those of the children. The role of the mediator is to facilitate that agreement reached between the parties rather than to impose an agreement which is what a Court may do.  We can arrange referral to Mediation.

The mediator cannot give legal advice but is independent of both parties and the Court.  Each mediation session normally lasts about 1½ hours and mediation involving finance can take between 3 and 6 sessions before a conclusion is reached.  Children matters normally take between 1 and 4 sessions.  It is essential that both parties give full and frank disclosure of their personal and financial circumstances.  In certain situations where a dispute involves children and the children are old enough the mediator can see the children and feed back to the parties what the children say.

The advantages of mediation are that it can be a cheaper, quicker and more effective method of settlement that Court proceedings. This is because the parties themselves have reached an agreement that they are reasonably happy with and therefore it is one that is likely to be fair and effective.

At any time during the mediation process you would be able to take advice independently from us and then resume the mediation. Mediation may not be appropriate if you consider that you would not be in a fair bargaining position with your spouse or former spouse or that you feel that for whatever reason you would have difficulty discussing matters directly with your spouse or former spouse even through a mediator.

The mediator can give you information about the relevant law.  Solicitors can, if necessary, provide you with legal advice in between mediation sessions, to help you to feel informed and at ease during mediation negotiations.

If financial matters need to be resolved, full financial information has to be provided.  The mediator will give you guidance to help you do this.  You may also wish to involve us at this stage, which mediators encourage.

The discussions that take place in mediation about possible solutions are confidential.  However, any financial information that is produced can be shown to a family court, if necessary and appropriate.

Once a consensus is reached in mediation, we can advise on the appropriate legal formalities that would ensure that your proposals become legally binding.

Mediation can help couples to:

• reduce tension and hostility
• make decisions on an informed basis
• tailor-make solutions to their particular requirements
• communicate and co-operate
• explore and examine options
• appreciate and consider the needs of the children
• express their feelings in a secure environment
• save legal costs because the process can help to resolve many issues.

Mediation may not be appropriate if you consider that you would not be in a fair bargaining position with your spouse or former spouse or that you feel that for whatever reason you would have difficulty discussing matters directly with your spouse or former spouse even through a mediator.

You can consider mediation at any point during the case, not just the outset.

Collaborative Law

Collaborative law is fundamentally changing the way people think about family law.  For separating couples who generally seek a fair solution and want to minimise the pain of a family breakdown it may offer the very best way ahead.

Collaborative lawyers sign an agreement with you which disqualifies them from representing you in Court if the Collaborative process breaks down.  That means they are absolutely committed to helping you find the best solutions by agreement rather than conflict.  The best solutions are often those which are able to work out together in which all of you can share rather than a Judge who doesn't know you imposing a settlement.  The process is carefully prepared but you and your former partner sit down in a room together with your solicitors and discuss the issues face-to-face.

For it to work it needs the right people with the right frame of mind.  They have to have a genuine desire to make it work and a willingness to disclose honestly and fully all information about their circumstances.  It doesn't mean that you already agree on everything otherwise you wouldn't need lawyers.  The Collaborative lawyer's skills are not only the very best experts in family law but also those who have been trained to settle disputes in a collaborative way.  It is often successful because you have the benefit of your own legal advice at the time when you are discussing matters rather than in mediation where the mediator is not able to give advice and there is a significant time delay with you being able to seek advice from us in the mediation process.  There is no threat of Court proceedings hanging over you and the additional pressures and costs that that can bring.

You set the agenda so you talk about the things that matter to you most.  You set the pace because you are not governed by Court dates and appearances.  You maintain a level of contact with your former partner which could form the basis of a long term understanding and accord which is immensely beneficial if there are children involved.

In collaborative law there is full and frank disclosure.  All discussions take place in a four way meeting.  We would be present to help you articulate your views, advise you and secure your interest.  The lawyers and you commit to working in a non-confrontational way with mutual respect and a desire to resolve things sensibly and amicably.  In particular situations it is possible to have matters referred to trained counsellors who can help you emotionally and improve communication with your spouse and partner, financial experts who are able to give information with regard to tax or financial investments.  Experts who are able to deal with any particular problems that the children might have.

It may be worthwhile talking to your spouse or partner about collaborative law and share this information.  Information about collaborative lawyers can be found at http://www.resolution.org.uk/.  The benefits of collaborative law can be both the non-confrontational team based approach which focuses on the matters which are important to you; the process involves you rather than Judges making decisions.

If you would like more information about collaborative law then please let me know.

Family Law Protocol

The Courts have introduced pre-action protocols which are aimed to build or increase the benefits of an early but well informed settlement which generally satisfies both parties to the financial dispute. These are firm guidelines which govern the way cases should be conducted. If proceedings are subsequently issued the Court would be entitled to decide whether there has been non compliance with the protocol and if so whether non compliance merits consequences.

1. one part of the protocol is for you to bear in mind that mediation may well be an appropriate or alternative to solicitor negotiation or Court based action;
2. the parties should not consider commencing Court action when a settlement is a reasonable prospect;
3. the protocol underlines the obligation of parties to make full and frank disclosure of all material facts, documents and other information relevant to the issues. This is an ongoing duty throughout the conduct of negotiations before and after the issue of proceedings;
4. the aim must be for the parties to clarify their claims and identify the issues with the help of their solicitors as soon as possible;
5. openness in all dealings is essential;
6. excessive or disproportionate costs should not be incurred;
7. correspondence must focus on the clarification of claims and identification of issues. Protracted unnecessary correspondence must be avoided;
8. the impact of correspondence upon the reader and in particular the parties must be always be considered.

The general principle is that all parties and their advisers must bear in mind the overriding objective as set out by the Court when trying to resolve financial claims in that:-

1. a just outcome is achieved;
2. this is achieved as speedily as possible;
3. without costs being unreasonably incurred;
4. the needs of any children should be considered and safeguarded;
5. the proceedings should be conducted with a minimum of distress and in a manner designed to promote a good and continuing relationship.

Costs Warning

The Court can decide that you should pay all or part of the costs of the other party.  Generally the Court will not make Orders for costs, however, if as a result of the conduct of one party the Court considers it is just to do so, they can Order costs.  The factors they will take into account is whether or not reasonable offers of settlement have been accepted, the conduct of a party in relation to the proceedings, failure to comply with Orders and rules, and the manner in which the case has been conducted.  Also, whether it was reasonable for a party to raise or contest a particular allegation.

Court Procedure

If the parties to a divorce or judicial separation cannot agree a financial settlement between them, the Court can be asked to make a decision in the proceedings known as 'ancillary relief proceedings'.  There would be a Court fee of £210 to issue the Application.

The Court has the power to order people to pay maintenance, pay a fixed sum of money to the other party known as a lump sum payment or can make a property adjustment order which transfers privately owned property or tenancies into the name of the other party, or order property and other assets to be sold and the proceeds divided. The Court can also make orders dealing with pensions, endowments and other investments.

Section 25 Matrimonial Causes Act 1975 Factors to be taken into account by the Court

The factors the Court will take into account are set out in Section 25 Matrimonial Causes Act.

This Section says that it should be duty of the Judge in deciding the financial cases to have regard to

1. all the circumstances of the cases;
2. first consideration being given to the welfare of any child of the family who has not obtained the age of 18.

In addition, the Judge will have regard to the following matters:

1. the income, earning capacity, property and other financial resources which of 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 be, in the opinion of the Court, reasonable to expect the parties of the marriage to take steps to acquire.
2. the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future.
3. the standard of living enjoyed by the family before the breakdown of the marriage.
4. the age of each party to the marriage and the duration of the marriage.
5. any physical or mental disability of either of the parties to the marriage.
6. 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.
7. 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.
8. in the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit (for example, a pension) which by reason of dissolution or annulment  of the marriage, that party will lose the chance of acquiring.
9. as regards the exercising of the Court's powers in relation to a child in the family the Court shall have particular regard to:
   1. the financial needs of the child;
   2. the income and earning capacity (if any), property and other financial resources of the child;
   3. any physical or mental disability of the child;
   4. the manner in which he was being and which the parties to the marriage expected him to be educated or trained;
   5. the considerations mentioned in relation to the parties' marriage in paragraphs a), c) and e) above.

It shall be the duty of the Court to consider whether it would be appropriate to end the financial obligations between the parties so soon after the grant of the decree absolute as is just and reasonable.

Where the Court considers that maintenance should be paid, the Court should consider granting maintenance only for such a term as would, in the opinion of the Court, be sufficient to enable the party in whose favour the Order has been made to adjust, without undue hardship, to the termination of his or her financial dependence on the other party.

In certain circumstances the Court, whilst making a Maintenance Order, can fix a defined date by which the maintenance will end and confirm that the receiving party will not be entitled to make any further application in relation to the maintenance.

In proceedings such as yours, where a party to the marriage has, or is likely to have, any benefit under the pension scheme, the court shall additionally consider whether financial provision order should be made and if it feels that it should, how the terms of the order could be affected having regard to any such matter. If the court does decide to make a financial provision order, it can make provision for dealing with pensions. More likely, the court may make a greater or lesser financial provision order to take into account loss of pension benefits as a result of the breakdown of the marriage.

Pensions

The Court has a number of powers and methods of dealing with Pensions.

The first is known as ‘off-setting'.  This means that the Court looks at the transfer value of the pensions and decides that the person without significant pensions should receive an equivalent payment in capital from some other source.  This is only possible where there is spare capital available after rehousing you and your spouse.

The second option open to the Court is a pension sharing Order.  This means that an existing pension fund is divided, not necessarily 50-50, and passed over to the other person which, in practice, in most cases, will then have to be invested in a new pension.

The third option, not often used, is pension attachment, formerly known as ‘earmarking'.  The Court has the power to order that a proportion of a pension, once retrieved both as to the annual income and the lump sum, should be paid to the other spouse.  The Court has the power to order that a proportion of any death in service benefit should be paid to the other spouse as well.

The problem with pension attachment Orders is that they are complicated to draft and if the person receiving the attachment Order remarries then no continuing annual payment will be made.  If someone changes job then that will mean that an Order regarding a death in service benefit will be of no effect.

Preparation for Court Action

It will save time and money if you can provide me with information relating to your financial position direct rather than requests being made of financial institutions by me on your behalf. Please be kind enough to ensure that you retain all documentation relating to your financial position from now on, such as Bank Statements, bills, invoices, letters from your lending and savings institutes.

To enable the Court to make a decision in proceedings such as these, all relevant information has to be before the Court and both parties have a duty of full and frank disclosure of their income, assets, liabilities and personal circumstances.  If you do not disclose relevant information you can be penalised by the Court. For example, an Order for costs can be made against you, a more favourable order can be made for the other side in the absence of information from you or the Court could commit you to prison for disobeying an Order which specifically required you to provide certain information. Please also ensure that you notify us of any changes in your financial circumstances as the case proceeds.

Ancillary Relief proceedings are now subject to a very tight timetable which must be strictly adhered to.  Once proceedings have been issued with our assistance, you will have to act quickly to gather the information and evidence together that the Court will require. The onus is on you to provide us with this information.  As mentioned above, the Court may penalise one party in the payment of the other side's costs if one party fails to meet Court deadlines or conduct the case reasonably.
As mentioned above, the Court may penalise one party in the payment of the other side's costs if one party fails to meet Court deadlines or conduct the case reasonably.

Once the application has been filed with the Court, the Court will allocate a first appointment which will be fixed 10 to 14 weeks after the date of filing.  Both parties will have to attend this appointment.  The date of the appointment cannot be altered without the Court's agreement.

Preparation of your Statement

Five weeks before the appointment, both parties have to exchange a sworn (signed) Statement of Means which gives full details of their liabilities, income, property and other assets.  Before this we will send you the draft statement for you to complete and a list of information we require.  It is very important that you act quickly to deal with this.

Attached to the Form E Financial Statement you must include:

1. a copy of any current (ie, within the last six months) valuation of each property that you have an interest in.
2. a recent mortgage statement confirming the sum outstanding in respect of each mortgage loan or charge secured on any property that you have an interest in.
3. statements or passport copies covering the last 12 months for each Bank statement, Building Society or National Savings Accounts that are either in your name or in which you have an interest.
4. the latest statement showing the value of each PEP, ISA, Tessa or National Savings Account that you have or have an interest in.
5. copy dividend conformation in respect of each stock, unit trust, share, guilt or other quoted security that you own or have an interest in.
6. a current surrender valuation for each Policy of Life Assurance and/or Endowment Policies in your name.
7. proof of all debts owed by you.
8. copy of the business accounts for the last two financial years for each business interest you have.
9. any documentation that is available to confirm the estimate of the current value of the business, for example, a letter from an Accountant or a form of valuation that has already been obtained.
10. a recent statement showing CETV (Cash Equivalent Transfer Value) of each of your Pensions or, if not available immediately, a copy of a letter that you have written to the Pension Company requesting such a valuation.
11. your P60 for the last financial year in respect of each employment that you have.
12. your last three wage slips in respect employment that you have.
13. your last P11D if you have been issued with one in respect of each of your employments.
14. a copy of your last tax assessment or, if that is not available, a letter from your Accountant confirming your tax liability.
15. in respect of self-employment or partnership income, a copy of the management accounts for the period since your last full accounts if the net income is expected to be significantly different.

The Court may impose cost penalties if these are not attached.

Not less than 14 days before the first appointment, each party will be able to file at Court and serve on the other party a questionnaire requesting further information, a List of Documents which are required from the other party, and a brief statement of the matters in dispute between the parties; a concise Statement of Issues and a Chronology.

The First Appointment

The object of the first appointment will be to see what is agreed and what is not agreed between the parties and save costs.  The District Judge will give directions as to the future conduct of the case including how assets are to be valued, further evidence required, which documents should be disclosed, and (except in exceptional cases) fix a date for a 'Financial Dispute Resolution Appointment'. It may be possible to negotiate a settlement at Court that day.

The Second Appointment: Financial Dispute Resolution 'The F.D.R Appointment'

Only in exceptional cases will there not be a Financial Dispute Resolution Appointment.  Both parties must attend.  All directions given at the first appointment will have to have been complied with in order for the financial dispute resolution appointment to proceed.  Cost penalties may be ordered against parties who have failed to comply with directions. i.e. you could be ordered to pay part of your opponent's legal costs as well as your own. The purpose of the financial dispute resolution appointment will be to attempt to reach an agreed settlement between the parties and to avoid the matter going to a final hearing.  All previous offers exchanged between the parties including Calderbank offers and those made on a "Without Prejudice" basis (see below) will be before the District Judge in the interest of reaching a negotiated settlement.  If no settlement can be reached, then the matter will go to a final hearing.  Each party make representations to a District Judge who will see much of the disclosed documentation but will not hear evidence from the parties.  The District Judge, after hearing the representations, gives an indication as to the likely settlement and invites the parties to consider settling the case.

Consent Application

At any time in the proceedings, agreement may be reached by negotiation.  In this instance, a document detailing the terms of the agreement will be drafted.  This is called ‘Minutes of Order' or ‘Minutes of Consent Order'.  This is approved and signed by both parties.  The document is then sent to the Court together with a Court Fee of ₤40.00 and a document headed ‘Statement of Information'.  This documents sets out the very basic information relating to the parties, financial and personal circumstances, so that a District Judge has background information to decided whether or not to approve the Minutes of Consent Order.  Even though the parties have reached an agreement, it will only become an Order once a District Judge has approved the terms of circumstances.

Final Hearing

You may be represented by a Barrister at the final hearing and in most cases you have an opportunity to meet with your Barrister and discuss your case generally with him or her at an earlier stage.

We and your Barrister will advise you concerning a possible outcome for the proceedings and will also advise you on any evidence that you will need to produce to the Court.

You will be asked to give evidence about the case as will witnesses who are to support your case. The other party will also give evidence. Both of you will be cross-examined as to your evidence.

Pension

If either party has a pension then the law says this must be taken into account in deciding any settlement. That does not necessarily mean that there will be a Pension Sharing Order. Nowadays pensions can be more valuable than the property.

It is important to consider the pension provision as you will need to provide for yourself in retirement. The value of the State Pension provision in old age is reducing significantly compared with the cost of living.

In matrimonial/financial proceedings the pension is part of the marital assets, whether it belongs to you or your spouse. There are 3 ways of dealing with a pension asset:-

1. Offsetting - The Court looks at the divorcing parties' finances and can compensate one party for the loss of pension rights by for example giving that party a larger share of the house. Offsetting will depend on what assets are available;
2. Pension Sharing - Pension Sharing Orders became available for divorce actions commenced after 1st December 2000. A pension can be shared. The Court can order a pension scheme to take a share of one parties' pension rights and pass those to the other spouse, which effectively becomes a separate pension. However, for example sharing a pension 50/50 may not necessarily provide half the pension income for the spouse receiving the pension rights. It may be possible to place the new pension rights in a completely separate pension scheme. In this case you would be able to choose when to retire and the payments would not be affected by the death of the original pension holder;
3. Attachment/Earmarking Order - The Court can order the pension scheme to pay part of the payments due to one party to the former spouse. In this case the pension remains in the original parties' names. The ex-spouse remains dependant on the pension scheme member and has to wait for the member to decide to retire before receiving an income. Income payments will stop on the death of either party or if the ex-spouse gets married again.

Conduct & Cost Orders of the Financial Proceedings

The general rule in ancillary relief (financial) proceedings, is that the Court will not make an Order requiring one party to pay the costs of another party.

In other words, you must expect to pay your own legal fees and I refer you to the costs estimate given to you separately.
However, the Court may make a Costs Order at any stage in the proceedings ‘where it considers it appropriate to do so because of the conduct of a party in relation to the proceedings (whether before or during them)'.  This is provided by Rule 2.7 of the Family Proceedings Rules.

In deciding whether the Costs Order should be made, a Judge must have regard to:

1. any failure by a party to comply with the procedural rules;
2. any Order of the Court or any Practice Directions which the Court considers relevant;
3. any open offer to settle made by a party (that is a letter setting out proposals for settlement of the case which the Court considers the other party should have accepted, thereby saving time and costs);
4. whether it was reasonable for a third party to raise, pursue or contest a particular allegation or issue;
5. the manner in which a party has pursued or responded to the application or a particular allegation or issue;
6. any other aspect of a party's conduct in relation to the proceedings which the Court considers relevant; and
7. the financial effect on the parties of any Costs Order.

The costs Ordered can cover the whole or part of the proceedings and can include solicitors' costs, barristers' fees and disbursements.  Costs Orders can be limited to the costs incurred in the preparation for an attendance at a particular Hearing or the extra costs incurred in preparation of the case caused by one party's conduct.

You can be ordered to pay part or all of your opponents costs if the Court considers you have not kept to the time limit or directions of the Court given in Orders; or if the Court consider you have acted unreasonably; or if you have not made or accepted a reasonable proposal to settle the case.

Other Aspects

You may also wish to consider making a Will for you and your family at this important time.  Our Probate Team specialise in this area and would be able to give you expert advice as to what is best for you in your current situation.  We can give you a fixed quote for the cost of your Will at the outset which is a cheap way of ensuring that your wishes are effectively taken care of after your death with the minimum of distress and worry for your family and dependants.

If, after the Decree Absolute is granted, you re-marry then the law prevents you from making or continuing with any financial claim for maintenance, capital or pension against your spouse.  You should, therefore, not re-marry until the financial matters have been resolved.