Financial Remedies

When a marriage or civil partnership comes to an end, it is essential to sort out your financial matters once and for all. This is done by obtaining a final financial order to settle your obligations to each other. If this is not finalised in this way then the other party’s claim will continue until their remarriage or death. This may store up future problems.

The law allows married couples and civil partners to ask the court for a number of “remedies” from the other spouse or civil partner including:-

Short and long term regular maintenance payments for a spouse/ civil partner
A lump sum
Transfer or sale of property,
Division of pensions
A change to trust arrangements.
Variation of a previous order

Each case is different and it is important to be aware that the majority of financial orders after divorce or dissolution are made by agreement without ever setting foot in court. Please see our section “options” for further information on process. As specialists in family law we can advise you on the realistic parameters to settle your case fairly.

That said the law does offer recourse if parties cannot agree.

Importantly there are important emergency steps which can be taken if there is a risk of a party hiding assets or if they have dissipated assets. The court may intervene to preserve property, set aside a particular transaction, or freeze assets in extreme cases. Freezing orders can be made in respect to assets at home or overseas- please see our international law section.

Where agreement cannot be reached or where the parties feel at a disadvantage in their knowledge of the each other’s financial estates and circumstances, then either party can apply to the court for financial relief by formalising an application for financial remedies.

It is possible to stop the court process at any time should agreement be reached at any stage during the proceedings. An advantage of the court process is that a timetable is set to ensure both parties provide full and frank disclosure of their financial circumstances. Certain costs sanctions can be imposed by the court for non compliance.

In order to start the process, a petition for divorce or judicial separation needs to have been issued at court. Notice then needs to be filed on Form A and currently there is a court fee for filing this application in the sum of £210. The party who files this application is called the Applicant and the other party is known as the Respondent.

There are three main stages involved in an application for financial remedies:

The first appointment

This is usually listed three months after the notice on Form A has been filed with the court.

During that time both parties have to complete and exchange a Financial Form E. Before the First Appointment takes place a number of documents have to be attached to a Form E. These can be summarised as follows:

Valuation evidence of any properties
An up to date redemption statement for any mortgages together with details of any mortgage penalties due
12 months copy bank and/or building society statements
Values including surrender values of all relevant endowments, insurance, investment products
The latest two years business and/or company accounts
Details of any directorships
Valuation of pension funds including the Cash Equivalent Transfer Value (CETV)
The latest P60 and copy three months wage slips

Following the simultaneous exchange of the completed Form Es, both parties’ legal advisers will then prepare:

A chronology of the significant facts and events throughout the parties relationship and/or marriage to the point of separation and occasionally beyond if relevant and necessary
A statement summarising the issues of the case
A questionnaire can be filed by either party seeking further information and documents following receipt of the Financial Form E.
A notice on Form G indicating whether the First Appointment can be treated as the next stage in the proceedings i.e. the Financial Dispute Resolution appointment (FDR) if all relevant and necessary information has been filed at that time, or whether the case has to proceed instead as a First Appointment.
Each party will set out what costs they will have incurred on their respective Form Hs.

This is important as both the parties and their legal advisers should always have the question of proportionality at the forefront of their minds. The cost of issuing any proceedings should always be considered.

Expert pension evidence may be required to assess the benefits payable on retirement and whether any pension inequalities arise that need to be explored further. The hearing is generally procedural and the filing of additional valuation evidence as well as considering the questionnaires that have been raised are considered by the Judge. The Judge will then direct that the parties and their legal advisers will attend the next hearing in the process, the FDR appointment. This is usually listed within 4 to 8 weeks of the First Appointment depending upon how much additional information is required to be filed in the interim.

Financial Dispute Resolution Appointment (FDR)

This is an informal hearing where the parties with the aid of their legal advisers are encouraged to try and reach agreement. The Judge presiding over the hearing can be invited to express a view on issues where the parties remain apart in an attempt to promote further discussion and hopefully settle matters by agreement. Where agreement is reached, Heads of Agreement are usually drawn up by the lawyers, which the parties sign and the order is then recorded on the court file, ahead of the final order i.e. the Consent Order being filed at court. The Consent Order which details the terms of the agreement is signed by the parties and their legal advisers and is then filed at court for the approval of the Judge when the order is made.

In the absence of agreement being reached, the Judge involved at the FDR hearing will be excluded from any subsequent final hearing, as they would have been privy to information, discussions and possible offers of settlement made at that hearing. A date is then set for the final hearing and occasionally further directions are made for the filing of additional evidence and/or statements for that hearing. An estimate of how long the final hearing will last is given to the court. Straight forward matters are usually dealt with within ½ to 1 day. Complex cases can take anything from 2 to 4 days.

The final hearing

This is a more formal hearing than the FDR appointment. Often last minute negotiations and discussions take place on the morning of the hearing and matters even at this late stage, can get resolved by way of consent and agreement. Very few cases proceed by way of the parties giving oral evidence in cross examination. Should matters proceed in that way, then the Judge at the final hearing listens to the evidence and then gives their judgment i.e. their decision as to how the financial assets in the estate should be divided. Judgment is either immediately given following the hearing, should there be sufficient time or more usually, some time afterwards. When considering what orders to make, the court will in the first instance, consider the primary legislation contained in the Matrimonial Causes Act 1973. When exercising those powers, the court’s first consideration is to the welfare of any dependant children under the age of 18 years. The court has a variety of orders available to them which can be summarised as follows:

Lump sum orders to either the other party or for the benefit of any dependant children

Property adjustment orders dealing with:

Transfer of properties specified by the court to the other party or a dependant child of the family
Specify property and make orders regarding the distribution of proceeds

Orders relating to the payment of periodical payments i.e. maintenance, to the other party on either a life time basis or a fixed term basis or extendable term basis.
Maintenance orders can also specify whether they should be subject to indexation i.e. why they are subject to an annual increase in line with the Retail Price Index and whether they should be paid for by way of standing order into a designated and identified bank account for the recipient.
Periodical payment orders can be paid for the benefit of children i.e. child maintenance orders providing this is done by way of agreement between the parties and which last for a year only. Child maintenance orders are preferred by some rather than entering into either voluntary arrangements or matters instead being referred to the Child Support Agency to assess.
Orders relating to pensions/pension sharing orders, offsetting pensionable claims against other available assets and/or property available.
Attachments and/or earmarking orders
The court can also make a settlement of specific property for example establishment of a specific trust fund often for the children of the family.
The variation of any nuptial settlement or trust made on the parties for the benefit of the other party.