Financial Disputes
It is a common misconception that a divorce will sort out the family finances, i.e., the division of assets, child maintenance payments, etc. But divorce proceedings legally end your marriage, nothing more. Arrangements about finances and children need to be settled separately.
Financial remedy proceedings are independent legal proceedings, though they often run in parallel with the divorce, that can be more involved and take longer to conclude and can cover all aspects of your financial position now and in the future.
Will I need to go to court?
Trying to sort financial disputes through mediation is always the first step, but each family’s situation is unique and working out how the finances should be split can be complex. We can help you understand each step of the legal process and support you in court should the financial dispute need to be resolved that way.
You or your partner can start financial remedy proceedings by filing a form with the court and paying the relevant fee. You may need to attend court three times.
Hearings will take place before a judge who will request initial proposals from the parties and who will give you an indication of how the case would be considered by a court. The judge will try to help you reach a negotiated settlement and avoid a final hearing. If an agreement is not reached at this stage, the parties are required to complete questionnaires and further hearings will be scheduled with the judge presiding over the case, parties will be cross-examined and if necessary, witnesses called, and evidence bundles presented.
The final hearing may run over several days and eventually the judge will make a final binding decision.
What is the difference between a consent order and a financial remedy order?
A consent order details what has been agreed between the parties. It needs to be submitted to court and agreed by a judge for it to become legally enforceable. A judge can reject the consent order if it seems unfair or unreasonable.
A financial remedy order is a legally binding document that sets out how the court has decided to divide your finances and assets. It used to be known as a financial order. The following financial remedy orders are possible:
- lump sum orders
- transfer of property orders
- periodical payments orders
- maintenance for one of the parties or children
- pension sharing or transfer
What is the starting point for settling financial disputes?
When settling a financial dispute, it is important to take the court’s approach into account. The law on this matter is very flexible and the court has wide powers and discretion when deciding on ‘fairness’.
The starting point of every financial dispute is to establish the financial resources or the so called ‘matrimonial pot’. Both parties need to disclose all relevant information regarding their financial circumstances. This includes all details of their income, earning capacity and capital and pension resources (worldwide).
After the financial resources have been established, the first consideration is the welfare of minor children – whether a suitable home for the children can be maintained and whether there should be any ongoing maintenance, and whether there are sufficient matrimonial funds to achieve a ‘clean break’. It is important to emphasise that even if there is a ‘clean break’ agreement regarding spousal maintenance, there is still maintenance payable for any dependent children.
The financial needs of each party, taking into account childcare costs, are assessed and then the relative income and future earning capacity of each party, along with their respective contributions, their ages, and the length of the marriage.
Because the court has a wide discretion in reaching a fair result, it is sometimes better to minimise the emotional stress and financial pressure on relationship breakdowns and avoid the uncertainty of going to court. We have substantial experience in complex small and big money cases, and we recognise that each case has its own unique facts.
If you need assistance, contact one of our lawyers at [email protected] or call (0845) 6020422 * for expert legal advice.
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