Matrimonial Financial Settlement Disputes
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.
Making a financial settlement legally binding
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?
What happens when you cannot agree on a financial settlement?
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’). The Financial Remedy proceeding is the process that helps settle financial disputes between divorcing couples in court.
You and your former partner will need to provide all the evidence, including the details of the means and assets, and the court can decide upon an appropriate settlement.
Here are some of 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 the relevant efforts have been made to settle issues before taking them to court. In the instance of no possible progress being made, unless there is court intervention, the application can then be proceeded with.
Application to the court
Once you have made your application, the court will provide a timetable, which will include directives 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 further 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 is 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 – to help you agree without 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 to attempt to settle the financial dispute between the divorcing couple. In certain cases, other Directions could be issued, including the valuation of assets or the obtainment of expert information.
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 proven under the provision 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 be filed with the court for approval.
- 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, children will be given main priority and be of top concern in any final decisions from 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.
At Eric Robinson Solicitors, our divorce lawyers will help you negotiate a financial settlement with your spouse. Financial matters can be complex to resolve, but our team 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 experts; if you are looking for some initial advice – book yours by completing the appointments form our family law financial agreements page.
For more information on Finances Following Divorce and Separation, you can download our advice guide here.