There is a common perception that when a couple get divorced, their finances are automatically settled. Unfortunately this is not the case as finances are considered as a completely separate entity to the divorce.
This means that if you have started divorce proceedings, it is important to consider a financial settlement being put in place, before the decree absolute has been issued.
Taking the financial matter to Court should always be the last resort. It is a very costly and time consuming procedure that can often leave both parties feeling disappointed.
There are many alternative options to taking matters to Court such as:
The purpose of these methods is to resolve all financial matters outside of the Court to try and reach a settlement that is fair and reasonable for both parties. If both parties are able to reach an agreement about the distribution of assets, a solicitor can draw up a document known as a Consent Order, which can then be filed at Court and neither party will be required to attend Court.
If an agreement about who should retain what assets cannot be reached, either party can make an application to Court. Following this application, both parties will be required to complete full financial disclosure of all their assets which is then exchanged with each other. The purpose of disclosure is so that both parties and the Court are aware of what assets are available for distribution.
There are three types of hearings that take place within financial disputes:
- First Directions Appointment (FDA)
- Financial Dispute Resolution Appointment (FDR)
- Final Hearing
The purpose of the FDA is to discuss how the case can progress. This could involve deciding whether valuations need to be done on properties/ businesses and deciding who will be carrying out the valuation or, disputing whether specific assets should or should not be included as matrimonial assets. The FDA provides an opportunity to raise any questions from the financial disclosure.
Prior to the FDR, both parties will have made offers to settle the case, however neither party is obligated to accept the offers. At this hearing, the legal representatives of both parties will inform the Court of their positions and can ask the Judge to give an indication of what they think the outcome of the case may be. A Judge cannot make an Order at FDR unless both parties are in agreement. Negotiations will take place on the day of the FDR in an attempt to settle matters. All negotiations, discussions and opinions at this hearing are without prejudice which means you can discuss matters openly and without reserve. If then the case does not settle (and most often do at this stage), then these offers and discussions cannot be referred to again.
The final hearing will involve speeches and cross-examinations of both parties. After hearing all of the evidence, the Judge will then make a judgement as to how the assets should be distributed. It is advised that parties reach a settlement without the need of a final hearing, as they lose control of the outcome.
A settlement can be agreed at any point up until the judgement at the final hearing. An Order will only be made if the Court considers it to be fair and reasonable for both parties.
At Emery Johnson Astills, we have a team who are highly experienced in financial disputes and trained collaborative lawyers.
If you would like further advice and information about financial proceedings, please contact a member of the Family Team at Emery Johnson Astills.