As hard as it may be to believe, there is in fact no time limit and your ex could return to court to claim money decades after your divorce – unless the financial agreements you reached with your ex are ratified by a family court and made into a binding ‘consent order’.
The government has spent a number of years encouraging people to treat divorce like a purely bureaucratic process and issue their own divorce petitions online. Unfortunately, the new government divorce website does not effectively highlight this risk, so people who make use of it without seeking independent legal advice could find themselves facing demands for an additional payout years down the line.
Lodging a financial claim 20 years after divorce
The absence of a time limit on financial claims when there is no consent order in place was vividly illustrated by the case of Wyatt v Vince. This concerned Dale Vince, founder of the successful green energy firm Ecotricity, and his ex-wife Kathleen Wyatt. The pair had married in 1981 and separated only three years later, although their divorce was not finalised until 1992. At the time both had very little money. In 1996, however, Mr Vince founded Ecotricity to generate electricity using wind turbines, and the company is now worth an estimated £57 million.
In 2011, nearly 20 years after the divorce Kathleen Wyatt was living in straitened circumstances and lodged a financial claim with the family courts, seeking a large payout from her ex-husband. He successfully appealed but his ex-wife and her legal team pursued the case all the way to the Supreme Court. There, Justices restated the principle that there is no time limit to such claims and explained that the family courts must take into account “the contribution of each party to the welfare of the family, including by looking after the home or caring for the family”. They therefore allowed the ex-wife to pursue her claim but made it clear that the unusual circumstances of the case meant the full payout sought was “out of the question”. Mr Vince and his ex-wife eventually settled in June 2016 for a more modest – but still substantial – sum. He was also required to pay her legal fees.
The amount of time that had passed since the couple’s divorce meant that the case attracted a lot of media attention and also caused a stir in the legal world. But Kathleen Wyatt’s claim ultimately succeeded for one simple reason: the courts could find no evidence that a binding consent order had ever been issued, so the possibility of a financial claim remained, even two decades after the divorce.
What exactly is a consent order?
Sometimes couples reach an agreement entirely amongst themselves. An informal financial settlement can be quick and of course costs nothing. But it may prove to be a false economy if things go wrong. The family courts cannot enforce an informal agreement with your ex: for that you will need a binding court order. A family solicitor will be able to draft such an order, setting out the details of your financial agreements, and then submit this to a court. Once it has been approved by a judge it will become a legally enforceable ‘consent order’.
Family law insists on dividing a divorcing couple’s assets according to the particular needs of each spouse. In most marriages one spouse usually has greater needs than the other, so most couples will still hold obligations to one another even after the divorce process has been completed and the decree absolute has been issued. For example, a stay-at-home mother may find it challenging to obtain employment and therefore require ongoing financial support: in other words, maintenance. If the couple had children, the wealthier party will almost certainly be required to pay child support. The payment of a lump sum following the future sale of a property or business is another common inclusion in consent orders.
Some consent orders specify a final settlement between the former couple, with no ongoing financial relationship of any kind. These are known as ‘clean break orders’, and they usually reflect an exchange of some kind. One party might, for example, agree to forego maintenance payments in exchange for a higher share of the proceeds from the sale of a property.
Consent orders are binding and – in most instances final, unless there has been what lawyers term ‘material non-disclosure’: i.e., one spouse failed to declare significant details or specific assets at the time of the agreement.
Without a formal, court-approved consent order, you will remain at risk of financial claims by your former spouse long after the decree absolute.
How do I protect myself from financial claims by my ex?
You can protect yourself by instructing a qualified solicitor to draft a consent order setting out the exact financial terms of your separation and then having this ratified by a family court judge.
This particular coin has another side: the so-called ‘remarriage trap’. If you tie the knot a second time, you will lose the right to make any further financial claims against your first spouse, even if those claims would have been fully justified. This is another excellent reason to ensure that all loose ends have been tied and your financial relationship to your former spouse is fully settled in a binding consent order.
Individuals who do not formalise their financial arrangements in a consent order often fail to consider the possibility that their ex- partner might take them to court years in the future – attitudes and circumstances can change dramatically over time, no matter how amicable the initial separation may have been.