Financial Settlement Disputes – What is the process?
When going through divorce proceedings or ending a civil partnership, you and your ex-partner will need to agree on how you will separate your finances and property and make financial arrangements for children, which is called the financial settlement.
A financial settlement will set out how you are going to divide all your current financial affairs, including savings, investments and pensions, and if there are going to be regular maintenance payments to help with children or living expenses.
If you can agree on future financial obligations and how to split your money and property without the involvement of court hearings, whether directly, through lawyers, or through a form of mediation, it will be best for all involved.
Involving the courts in financial disputes will be more costly, lengthy and can further impact an already stressful situation.
What happens when you cannot agree on a financial settlement?
If you and your ex-partner can agree on the details of your financial settlement and how you will divide money and property, you will need to apply for a Consent Order to make it legally binding. But what happens if you are unable to agree?
If communication breaks down, or you are unable to agree on everything, you can make a Financial Remedy Application, now known as a Financial Order (also known as the ‘contested’ route or an ‘Ancillary Relief Order’). Financial Remedy proceedings is the process that helps settle financial disputes between divorcing couples in court.
You and your former partner will be obligated to provide full disclosure and evidence of the details of your financial means and assets, and the court will then decide upon an appropriate settlement.
What are the steps involved in a financial remedy proceeding?
- Before the Application
- Prior to the actual application, the parties are encouraged to follow a Pre-Application Protocol.
This Protocol outlines the ways in which the parties should provide the required information from and to each other before making the initial application.
The idea behind the Protocol is to ensure that sufficient efforts have been made to try to settle the issues before taking them to court. In the instance of no possible progress being made, unless there is court intervention, the application can proceed. If a party fails to engage in the Protocol process they could be penalised when the court comes to consider how the legal costs should be settled.
Application to the court
Once you have made your application, the court will provide a timetable, which will include Directions for all parties to follow, which includes:
A date for when you and your former husband/wife will exchange financial statements (Form E).
A date for when Questionnaires (questions you wish to ask the Other Side for the purposes of extracting further relevant information), a Chronology (detailing the relevant dates in your Marriage), and the Statement of Issues are to be filed with the court. This usually needs to be 14 days before the First Appointment and the paperwork will need to be served upon your former husband/wife.
The date of the First Appointment (known as the FDA).
There are three stages to the process
- The First Appointment – a short hearing with the Judge to discuss your application
- Financial Dispute Resolution (FDR) Appointment – the aim of which is to try to agree a settlement without the application needing a final hearing (you might need more than one appointment)
- Final hearing – if you’re not able to agree, this is when a judge will decide how you must separate your finances
- First Directions Appointment
- The courts will set a First Directions Appointment (FDA) before a District Judge following the application.
The First Directions Appointment hearing is where the Judge can establish if full disclosure has been made or if further information is required from either party.
The Judge will decide if all necessary information is available before negotiations can begin in order to attempt to settle the financial dispute between the divorcing couple. In certain cases, other Directions could be issued, including requesting the specific valuation of certain assets or the obtaining of expert information (for example, in relation to the value of a business or pension fund).
If it is not possible to reach a settlement at the First Appointment, the District Judge will set a date for the Financial Dispute Resolution Hearing (FDR).
Financial Dispute Resolution Appointment
The Financial Dispute Resolution Appointment takes place when the necessary documentation and evidence has been provided under the supervision of the Judge. At this point, the parties then have the opportunity to negotiate.
However, if the parties cannot reach a settlement, then either of their solicitors or barristers will explain their cases to the District Judge.
The District Judge will indicate a predicted outcome if the case proceeds to a final hearing. This indication is not binding, they can either accept or disregard it, but it does tend to play a big part in aiding negotiations.
If you are able to reach an agreement at any stage of the process, prior to the Final Hearing date, a Consent Order can be drawn up to formally outline the terms and it will be filed with the Court for approval by a Judge.
Final Hearing
In the Final Hearing, the Judge listens to the evidence from both parties and makes the final decision on how the finances should be separated, and if there will be any ongoing responsibility regarding financial support from one party to another.
The decision will be incorporated into a Court Order, which will then be legally binding. The Judge will also decide if there should be a ‘Clean Break’ order, meaning that you and your former spouse would have no financial claim against the other.
As with all proceedings during a divorce, the welfare of any children will be given main priority and will be of top concern in any final decisions made by the court.
If you are going through this process, it is vital you seek early expert advice to ensure you are properly represented, that you fully understand your legal rights and obligations and that any assets are settled fairly.
How can Eric Robinson Solicitors help?
At Eric Robinson Solicitors, our divorce solicitors will help you negotiate a financial settlement with your spouse.
Financial matters can be complex to resolve, but our solicitors have years of experience in the divorce process – handling difficult settlements and securing results that protect your best interests.
A family law solicitor can help reach a divorce settlement quickly and efficiently, avoiding potential court proceedings.
However, if it is not possible to reach an agreement, we will represent you at every step of the way, and we will advise you on the relevant factors involved in your case and how the court will approach a settlement.
We will also help you to understand what the possible outcomes could be so that you can make informed choices throughout the case.
We offer free initial consultations with our family law solicitors; if you are looking for some initial advice – book yours today by simply filling out the form on the left hand side of this page.
We have solicitors offices in Southampton, Hedge End, Chandlers Ford, Winchester, Lymington and Richmond-Upon-Thames.
For more information on Finances Following Divorce and Separation, you can download our Top 10 Tips Guide.
