By Kate Williams, Solicitor, Family Law team
When a couple makes the decision to divorce, there are a number of options available when sorting out their financial arrangements. At Hugh James we understand that the circumstances surrounding every separation will be different, which is why we will always discuss a range of options with each client to determine the best way forward for them.
This post will look at the following options:
- mediation
- arbitration
- the collaborative process
- negotiations through solicitors
- Deed of Separation
- court proceedings
For couples who are able to communicate well, a good place to start may be to discuss matters directly to try and reach an agreement. If couples are unable to make any progress through direct discussions, then they could look to involve a third party to assist them in reaching an agreement.
Mediation
If a couple find themselves in a situation where they are unable to reach an agreement through direct discussions, then one option is to attend mediation. Mediation involves a trained third party (a mediator), meeting with the couple. The role of a mediator is to help the couple communicate and reach an agreement, and mediation can involve discussions relating to finances as well as arrangements for children. Mediation can be carried out together, or if a couple is finding it difficult to get along, then it can take place with each person in separate rooms with the mediator going back and forth between the parties to assist with reaching an agreement. This is known as ‘shuttle mediation’.
The mediator will remain impartial during each session and will not provide legal advice or make any decisions as to what should happen with a couple’s financial arrangements; this decision will be made by the parties.
Mediation is a great option for couples who are open-minded and committed to reaching an agreement. It can also be far more cost effective than making a court application or negotiating through solicitors, however, this depends on how many sessions take place and how committed each party is to reaching a resolution. Some people also find it useful to attend mediation and then liaise with a solicitor afterwards to check that any potential agreement reached is fair and reasonable in the eyes of the law.
There is also government funding available to couples who would like to engage in mediation where all or part of the discussions relate to children. Mediation can often be an attractive option as it allows parties to reach an agreement themselves, rather than having a decision imposed upon them by the court. However, if one or both parties are resistant to attending mediation, or if communication has broken down significantly, then mediation is often unsuitable.
An agreement reached in mediation is not legally binding, however, if a couple would like to make their agreement legally binding, then they can visit a solicitor who can assist them with preparing a Consent Order setting out the agreement reached, that can then be filed at court. The agreement will become legally binding once the court approves the Consent Order. A Consent Order cannot be submitted to the court until divorce proceedings have reached the stage of Decree Nisi/Conditional Order of divorce (the stage of divorce following the divorce petition being filed and issued, and the respondent filing their acknowledgement of service).
Arbitration
Arbitration is another way of achieving an agreement in respect of the finances without the need to make a court application. Arbitration is a form of alternative dispute resolution, where the parties would appoint an arbitrator (someone officially chosen to settle a dispute) to make a decision in relation to the finances that would then be legally binding upon the parties. This option allows for more flexibility than the court process, as the parties are able to decide on their own timetable, and they can decide who will be the arbitrator.
Arbitration as a process can often conclude within a shorter timeframe than court proceedings and can be used to discuss matters related to children, as well as finances. Our Family Law team can provide advice as to whether arbitration is the right option.
It is worth noting that arbitration can also be explored by non-married couples, for example, when dealing with disputes surrounding property ownership.
The collaborative process
Couples may also find it beneficial to seek the help of a collaborative lawyer to assist them in reaching an agreement. Collaborative lawyers are specially trained lawyers who will help a with reaching an agreement, taking account of the circumstances of the family as a whole. The collaborative process would involve both parties instructing their own collaborative lawyer, where the parties and their representatives would meet and attempt to reach an agreement. The benefit of this is that both parties would have the benefit of a lawyer present to assist with negotiations, and this can be a useful way of resolving matters without the need for court intervention.
Any agreement reached through the collaborative process would need to be drawn up into a Consent Order by a solicitor and approved by the court for it to be legally binding. This is especially important to prevent further claims being made by either party against the other following the agreement being finalised.
Negotiations through solicitors
If couples are finding it difficult to reach an agreement in relation to children or financial matters, then the couple may decide to approach a solicitor to attempt to make progress in that way. A solicitor in these circumstances would only be able to act for one party, but that party can decide to what extent they would like their solicitor to be involved.
An individual could instruct a solicitor to provide ad hoc advice to them in relation to the relevant legal principles, or alternatively, they could instruct a solicitor to have a more involved role in the process. For example, a solicitor can be instructed to liaise with the other party to attempt to reach an agreement through negotiations within correspondence.
When an individual instructs a solicitor to attempt to reach an agreement through negotiations, the usual process is that an exchange of financial disclosure takes place between the parties. Once the solicitor has had sight of both parties’ full financial disclosure, they can assist with advising their client on the range of appropriate outcomes.
Our Family Law team have significant experience in constructing and advising on offers for settlement and formalising the terms of any agreement reached.
Deed of Separation
If an agreement is reached between parties, a Consent Order can only be submitted to the court to make the agreement legally binding once Decree Nisi has been obtained in the divorce. If a couple finds themselves in a position where they have reached a financial agreement but have not yet obtained Decree Nisi, then an option could be to set out the terms of the agreement within a document called a ‘Deed of Separation’.
A Deed of Separation is not legally binding, meaning that either party could attempt to go back on the agreement reached. However, a Deed of Separation can be persuasive to a court if they are properly drawn up with both parties obtaining independent legal advice. The weight that a court will give to a Deed of Separation also depends on the content of the agreement. A Deed of Separation can be converted into a Consent Order and submitted to the court once Decree Nisi has been obtained.
Couples can each instruct a solicitor to assist with preparing a Deed of Separation, and we can help you with this.
Court proceedings
If a couple is unable to reach an agreement on a voluntary basis, one or both of the parties may wish to make an application to the court to progress matters. Making a court application should be seen as a last resort as it can be a stressful, time consuming and costly process. The solicitors within the family team at Hugh James are hugely experienced in guiding clients through court proceedings and we always ensure to support our clients at every stage of the process.
Once an application has been made to court, there are usually three court hearings that take place, known as a first appointment (FDA), a financial dispute resolution appointment (FDR) and a final hearing.
The court proceedings will involve a process of exchange of financial disclosure between the parties. The vast majority of cases do not make it to final hearing as the parties will reach agreement once full financial disclosure has been exchanged. However, if the parties cannot reach an agreement themselves, then the court will make a decision for them in relation to the financial arrangements at the final hearing.
Under current laws, parties must have at least attempted mediation before they are able to make an application to court. Parties must attend a mediation information and assessment meeting (MIAM) where a mediator will assess the parties’ suitability for mediation. If the mediator deems that the parties are not suitable for mediation, then they will sign a form confirming the same which will form part of the court application.
