Divorce Financial Settlement (including Pensions and Property)

While the divorce itself is usually undefended and straightforward, sorting out financial settlement on divorce is often more difficult. If agreement cannot be reached then an application can be made to the court. You may find our Step by Step Guide to Divorce a useful read.

Negotiating a Financial Settlement

It may be possible to reach an agreement with regard to your property and finances. If agreement is reached without the benefit of legal advice, then your solicitor can be asked to draw up the agreement in such a way that it can be converted into a court order. A court order is legally enforceable and final. It is important to obtain this if you want to ensure any agreement is complied with – and to protect against possible future claims. Before making an order the court requires a summary of you and your partner’s financial circumstances to ensure the order is fair. Where both parties have the benefit of legal advice the Court rarely refuses to make an order which has been agreed by the parties. It’s desirable, prior to reaching an agreement, for each party to have full knowledge of the other’s financial position. If negotiation is through solicitors then each party’s solicitors will request full disclosure from the other side before embarking upon detailed negotiations and approving a proposed settlement. If agreement cannot be reached then it may be necessary to issue court proceedings. Prior to this your solicitor will have advised you, based upon available information, as to the range of outcomes.

Court proceedings

Commencing court proceedings doesn’t always mean the case will be decided in court by a judge. It is possible that at some stage after proceedings commence, agreement will be reached as a result of ongoing negotiations. If this happens court proceedings can be concluded and an order prepared by agreement for the approval of the judge, without the need to attend court.

A Guide to the Court Application Process

Step 1 – Issuing an Application
Either the applicant or respondent starts proceedings by issuing an application. (A fee is paid to the court when the form is lodged). Upon receipt of the application the court issues a timetable requiring each party to file and serve financial statements within a specified period. A schedule of assets is prepared jointly for the court together with a statement of the issues in the case. Financial statements are provided on a standard form (Form E). The form requires full disclosure of all income and assets and the production of various documents such as bank statements, P60s, business accounts, pension transfer values etc. The timetable usually allows for either party to raise questions they may have about the other’s financial statement, prior to the first court appointment. The timetable also sets a date for the first court hearing – usually around 3 months after the application is issued, to allow for the preparation of financial statements and any negotiation.

Step 2 – First Hearing
The first court hearing is known as the First Directions Appointment (FDA). It is usually a short hearing when the judge considers each party’s financial statements and questionnaires and gives direction as to what further evidence, if any, is needed. The court will set a time limit for the filing of any further evidence and will adjourn for a further hearing.

Step 3 – Second Hearing
The second hearing is known as a Financial Dispute Resolution Hearing (FDR). This is normally around 8 – 10 weeks after the first hearing. At the FDR each party’s lawyers are asked to summarise their client’s positions. The judge will usually indicate the sort of order he would be inclined to make at a final hearing. The judge will urge the parties to try to reach agreement and ensure that they are aware of costs being incurred. Many cases settle at the FDR because parties review their position in the light of the judge’s indications. If agreement is reached then this agreement can be incorporated into an order and the judge can be asked to approve the order at this hearing. The judge can’t compel parties to reach agreement and if agreement isn’t reached the judge will order the case go to a final hearing. If this happens, then the judge who dealt with the FDR can’t sit at this final hearing. The judge at the final hearing won’t be aware of the indication given by the judge at the FDR, so will approach the case completely afresh.

Step 4 – Final Hearing
If the case proceeds to a final hearing then each party gives evidence on oath and will be cross-examined by the other party’s lawyer. At the end of the hearing the judge will make a decision as to the final order. The judge has wide ranging discretion and will make the order that they consider to be fair. Given that the judge has a wide discretion, in most circumstances it is unlikely that an appeal against the decision will be realistic. Given the uncertainty of the outcome it is preferable for clients to reach agreement prior to a final hearing if possible.

Talk to one of our family solicitors in confidence about divorce or to arrange a no obligation initial consultation.