Divorce & Finances

Jane Sisson-Pell, Family Law Barrister

The stress of a divorce or the dissolution of a civil partnership can and often does take its toll. At this difficult time, if agreements cannot be reached about the property and finances, the parties may need to be prepared for court.

Jane explains divorce & finances

Jane specialises in financial remedy proceedings providing sound advice and strong representation in financial remedy cases. Every case is unique. Matrimonial assets might include the family home, a holiday home, a business, pensions, ISAs, shares, savings, rental properties, land and trusts.

Financial remedy proceedings are dealt with usually during, but sometimes after the divorce or dissolution of partnership has occurred. The average divorce takes between 4-6 months. However, the financial remedy proceedings can take longer and in some cases, the proceedings can take up to a year or more from start to finish.

Some financial remedy cases are straightforward. Other cases are just the opposite. Jane is experienced in dealing with cases involving pension division, business ownership and shareholding, inherited wealth, the dissipation of assets, hidden assets, pre-acquired assets, post-separation accruals, non-disclosure, interveners, variation of nuptial settlements, litigation misconduct, and appeals.

The best way forward

If you are reading this because you are separated, the best way forward is to try to sort the finances out amicably, as soon as possible after your separation. If this can be achieved you can both move on and start living independently. A useful starting point is for you to try to agree the asset base. This involves drawing up a table or a list of the matrimonial assets with agreed values, along with any liabilities (e.g. your mortgage, any credit card liabilities, any loans or store cards). In most cases, the asset base provides an overall picture of the matrimonial finances. However, in some cases, one party brought money into the marriage and there may be some dispute about what is matrimonial (joint) property and what property should be excluded.

Once the asset base is agreed, your future housing needs and your monthly income needs (and those of your children) should be listed. Then ask yourself this question: ‘we have worked out how much we own and what our monthly income is, but how should this ‘pot’ be divided between us, so that it is fair and meets our reasonable needs and those of our children?’ Working out the answer to this question can be a complex task.

Ask yourself, which one of the parents should be the parent with the care of the children? What is to happen to the family home? Should the family home be sold and the proceeds shared? If so, should that be in equal shares or should the parent with the day-to-day care of the child/children retain a larger share?

Then you will need to compare your respective pensions. It may be the case that one of you was the breadwinner and the other was the homemaker or worked part-time. If the homemaker or part-time worker has no pension or there is a significant discrepancy in the value of your respective pensions, then the larger pension may have to be shared or offset. (Only a court can make a pension sharing order or a pension attachment order).

There should be up-to-date valuations of all pensions. This will enable informed decisions to be made about dividing the pension assets fairly. Pensions can be a complex area in matrimonial finance and sometimes the services of an actuary or a pension expert are required.

Did one of the parties bring assets into the marriage (e.g. a property, savings or an inheritance)? Is there a good reason for them to retain that sum in its entirety in addition to their share of the matrimonial assets? Is that fair? One last point; you are strongly advised to take independent legal advice before agreeing a financial settlement.

Going to court – Key stages

If an agreement cannot be reached, then the pre-court protocol requires that in most cases, a Mediation Information and Assessment Meeting (called a MIAM) must be held with a view to holding future mediation sessions. If an agreement cannot be reached through mediation, financial remedy proceedings can be commenced by completing court Form A and paying the court fee of £255.

Financial remedy proceedings start a strict timetable running. Work must be undertaken by each party to ensure that their financial information is up-to-date and well-documented in Form E. Form E is 27 pages long. All supporting documentary evidence must be gathered and attached to Form E to be served on the other party by the date determined by the court.

The rule is that there must be full and frank disclosure of all financial information by each party. That means that nothing should be hidden and the parties must ‘put their cards on the table, face up’. The courts attitude to non-disclosure is hardening and on 27.10.15 in the reported case Al-Baker v Al-Baker [2015] EWHC 3229, Mr Justice Mostyn sentenced the husband to 9 months immediate imprisonment for contempt of court for failing to disclose his assets when the court had specifically ordered him to do so.

In addition to the completion of Form E, there is further work to be undertaken prior to the first appointment at court. This involves each party preparing a Statement of Issues, a Chronology, a Questionnaire, and an estimate of their Costs to date. All work must be undertaken in accordance with the strict timetable. Jane’s input is really useful at the ‘paperwork stage’. She assists her clients to complete the necessary forms.

The first appointment provides the parties with an opportunity to negotiate and, if possible, to reach an agreement leading to a Consent Order.

The judge may order an expert valuation of the former family home if the parties can not agree on its value. The judge will look at the parties respective questionnaires and determine which questions should be answered. In short, the first appointment is a housekeeping hearing where all outstanding information is identified and directions are made to ensure that the value of the matrimonial pot is known for the next hearing.

After the first appointment the next hearing is the Financial Dispute Resolution hearing (FDR). At this hearing the judge expresses a view in respect of the possible outcome, should the matter proceed to a full hearing and then time is allowed for negotiation, between the parties and their respective lawyers. The court expects both sides to fully engage and to endeavour to reach an agreement in order to conclude the proceedings there and then. Much of court time is taken up with lengthy negotiation between the parties’ respective lawyers. Jane prepares her case fully and is a strong negotiator. She works hard to obtain fair outcomes for her clients.

If no agreement can be reached at the FDR hearing the judge (having given an indication of his or her own thoughts on what the outcome is likely to be) will have no further involvement in the case. The final hearing will be heard by a different judge. The final hearing is often listed for a day or more when each party has the opportunity to give evidence and the court makes the final Order. Final hearings occur in approximately only 9% of financial remedy cases.

How will the judge determine the outcome?

There is no set formula for the district judge to work out ‘who should have what’ in financial remedy proceedings, because each separating couple’s case is unique and ‘one size, does not fit all’. However, the district judge will be guided by the provisions of section 25 of the Matrimonial Causes Act 1973, which sets out a number of factors to be taken into consideration in every financial remedy case.

Section 25(1) provides that the court will give first consideration to the welfare of any child of the family who has not attained the age of eighteen.

Section 25 (2) provides – As regards the exercise of the powers of the court ………… in relation to a party to the marriage, the court shall in particular have regard to the following matters:

(a) the income, earning capacity, property and other financial resources, which each of the parties to 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 in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire;

(b) the financial needs, obligations and responsibilities, which each of the parties to the marriage has or is likely to have in the foreseeable future;

(c) the standard of living enjoyed by the family before the breakdown of the marriage;

(d) the age of each party to the marriage and the duration of the marriage;

(e) any physical or mental disability of either of the parties to the marriage;

(f) 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;

(g) 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;

(h) in the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit …which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.

Ready to get started?

You will be fully supported and in control of your case at every stage.

Jane is authorised to practise by the Bar Council and is regulated by the Bar Standards Board. She has a right of audience in every court in England and Wales. Jane can be contacted via the Bar Council Public Access Register.

For legal advice on divorce and finances, get in touch for a quick quote:

T: 01484 660124
M: 07881 905 139