Financial Dispute on Divorce
THE COURT PROCESS FOR FINANCES ON DIVORCE
Once divorce proceedings are issued, either party can apply for an Order from the court to settle the financial issues on divorce.
POWERS OF THE COURT
The court has specific power to make certain orders regarding the finances on divorce. The court can order:-
That one party should pay the other party periodical payments by way of maintenance for the party (not the children). The court can also order that such periodical payments should be secured.
That one party should pay the other a lump sum payment
That one party should transfer their interest in a property to the other party.
That a property should be sold
That there should be an earmarking order in relation to a pension or a pension sharing order.
MATTERS WHICH THE COURT TAKES INTO ACCOUNT
When considering what orders should be made the court will take in to account the following:-
- Income, earning capacity, property and other financial resources which each of the parties have or is likely to have in the foreseeable future, including, in the case of earning capacity, any increase in the capacity which it would, in the opinion of the court, be reasonable to expect a party to the marriage to take steps to acquire. In addition, the court is to have regard to any benefits under a pension scheme which either party has or is likely to have in the future.
- The financial needs, obligations and responsibilities which each of the parties has or is likely to have in the foreseeable future.
- The standard of living enjoyed by the family before the breakdown of the marriage.
- The age of each party and the duration of the marriage.
- Any physical or mental disabilities of the parties.
- 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.
- 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.
- In the case of divorce proceedings and/or nullity proceedings, the value to each of the parties to the marriage of any benefit (for example a pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.
In order to reach a decision about the finances on divorce the court will require all information as to both parties’ financial position provided by way of detailed documentary evidence.
These documents include:-
- Details of both parties’ income by way of wage slips, P60 and/or business accounts;
- Details of both parties’ outgoings;
- Valuations of the family home and any other property owned by either party with a mortgage statement for any mortgage;
- Statements for current and savings accounts of both parties and any investments either party has;
- Details of both parties’ debts;
- Cash Equivalent Transfer Values for all pensions.
REQUIREMENT FOR MEDIATION
Before any application can be made to the court it is compulsory for a referral to be made to a mediator for a Mediation Information and Advice Meeting (MIAM). This is an initial meeting for a Mediator to assess if your matter is suitable for mediation. You cannot apply to the court without a form from a local mediation service confirming that the referral for a MIAM has been made.
Proceedings are often issued because one party will not reveal their true financial position or because negotiations break down.
The court has a set procedure when dealing with a financial application:-
- The party making the application files an application form and pays the court fee;
- The court will fix a timetable for action to be taken including fixing an initial hearing date and serve the papers on the other party;
- The timetable will require both parties to file a statement providing full details of their finances with supporting documents, those documents being as outlined above;
- There will be provision for both parties to raise a questionnaire, asking for further information and clarification about what is disclosed in the financial statements.
If the parties have not adequately provided all the required financial information, at the hearing the judge will make an order as to what further information must be provided and the date by which this has to be done and will consider whether any assets need to be valued. He will also fix a further date for a “Financial Dispute Resolution Appointment” (FDR)
If the parties have filed their financial statements and replied to each other’s questionnaire, at the hearing, the judge will use the hearing as the FDR. This hearing is an opportunity to get the parties and their representative to the court to discuss the case and negotiate with a view to coming to a settlement. The hearing is before a judge who can give an “indication” as to the likely way in which disputes might be settled if the matter went to a final hearing. The judge can only make an order if there is a concluded agreement. If there is no agreement then the judge will make further directions and set the case down for a final hearing.
The judge will also direct that the case listed for a further hearing called a financial dispute resolution appointment. This hearing is an opportunity to get the parties and their representative to the court to discuss the case and negotiate with a view to coming to a settlement. The hearing is before a judge who can give an “indication” as to the likely way in which disputes might be settled if the matter went to a final hearing. The judge can only make an order if there is a concluded agreement. If there is no agreement then the judge will make further directions and set the case down for a final hearing.
If there is a final hearing then both parties will need to give evidence and the judge will then decide on a final Order. At this time a judge will make a final order after having heard all the evidence and the legal arguments. The judgment and the final order are binding upon the parties and they both have to accept the outcome imposed by the judge.
If one party is unhappy with the outcome they can seek legal advice as to whether there is any ground to appeal. Such appeals are difficult and the party appealing runs the risk of having to pay the costs if their appeal is unsuccessful.