Division of assets, liabilities and the procedures

There is a set procedure and timescale and prescribed forms which must be used. The new rules provide for applications for financial orders and financial remedies. The application form you use depends on whether you are applying for an order or a remedy.

The most significant stages in the new procedure are as follows:

  1. When an application is filed a date for the first appointment is fixed which must be in 12-16 weeks time.
  2. Form E (financial statement) must be prepared and exchanged by each party 5 weeks before the first appointment.
  3. If all the necessary preparatory work has been done it is possible for an application to be made to treat the first appointment as the Financial Dispute Resolution Appointment (FDR) – the District Judge decides whether or not it is appropriate to use the first appointment in this way.
  4. Up to date costs schedules have to be available for each party at each appointment.
  5. There are requirements for both parties to serve concise statements of issues and details of offers and proposals and responses to them before the FDR
  6. The FDR appointment is for the purpose of discussion and negotiation. The purpose of the scheme is to enable as many cases as possible to be settled at this point. At this appointment the District Judge can make a consent order, adjourn for a further FDR or if necessary give directions for a final hearing and fix a date for that hearing.
  7. If it is necessary for a final hearing to be fixed then the District Judge involved in the FDR appointment can take no further part in the proceedings. The final hearing must be before a different District Judge.

As part of the active management of the case the court must encourage the parties to settle at all stages.

If the parties agree a settlement in mediation it is the task of one party’s solicitor to draw up a consent order to be presented to the court based on the Memorandum of Understanding reached in mediation. The other party’s solicitor should have an opportunity of checking the draft order. A simple financial statement completed by both parties is also submitted (a form D81). This will be based on the factual information contained in the Open Statement of Financial Information. It also states where the parties and the children will live and whether either party intends to cohabit or remarry. The District Judge does have the power to refuse to make a consent order but this is rarely exercised.

a) If there are no proceedings and the parties have reached agreement about financial matters then they can instruct their respective solicitors to draw up a document called a separation agreement (or Deed of Separation) which will reflect what is set out in the Memorandum of Understanding. This can relate to financial and property matters as well as to arrangements for the children but cannot deal with pension sharing (as a Decree Absolute is necessary for pension sharing).

b) Many parties wish to consider having what is called a clean break order and the court has a duty to consider whether it is possible to achieve. This means that there is a clause in the order stating that neither party can make any future financial claims against the other or the estate of the other. This clause can only be put in an order if there are divorce/dissolution proceedings and the marriage/civil partnership is brought to an end. It is not always possible to have this type of order for example if one party needs ongoing financial support from the other.

c) If there are no divorce, dissolution or judicial separation proceedings it is possible to make an application to the Family Proceedings Court (Magistrates) for a limited number of orders either for a child or for a spouse/civil partner for example an order for maintenance.

New partner’s means

There is a section on the Form E (and the NFM Schedule of Assets) for a party to complete if they are living with or are married to a new partner. The information that they have to provide is an outline idea of the income and capital position of the new partner, as far as they know. The court will not make an award against that person’s assets or income but it may affect the amount that is awarded as, for example, someone’s housing needs are being met. The court also looks not just at what that person is contributing to the household but what they should be contributing.

Pre-nuptial agreements

A pre-nuptial agreement is an agreement entered into by the husband and the wife prior to their marriage which provides how assets will be divided between them if they are to divorce. It is no longer the case that they are against public policy. Although pre-nuptial agreements are not binding in this country, the Supreme Court has recently in the case of Radmacher v Granatino 2010, gone a long way towards changing the law in this area. The new test sets a presumption that they will be binding:

“The court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement.”

When is it likely that the parties will not be held to their agreement? The guidance given by the Supreme Court included:

  1. The pre-nup prejudices the reasonable requirements of any children of the family.
  2. The longer the marriage has lasted the more likely it is that circumstances have changed in a way that was not envisaged.
  3. Sound legal advice is desirable but not essential.
  4. The court can take into account a party’s emotional state and what pressures he or she was under to agree.

The contents of this article are general principles only.

The Courts recognise that parents are generally best placed to know what is in their children's interests and are encouraging parents to work this out together, with the assistance of a qualified mediator.  They acknowledge that mediation is not suitable in every case but for the vast majority it represents an opportunity for you to find a solution that fits best with your family’s circumstances.

Since April 2011, anyone applying to the Courts for assistance in resolving a dispute about parenting or finances following relationship breakdown has had to comply with the Pre-Application Protocol. This requires you to attend a meeting to learn about mediation – a Mediation Information Meeting (MIAM).

Legal aid is no longer widely available for divorce proceedings although if you are seeing a mediator and are legally aided you will be entitled to Help with Mediation if you instruct a solicitor who undertakes Family Legal Aid work.

National Family Mediation (NFM) is a network of professional family mediation providers based in England and Wales that work with families affected by relational breakdown. All providers aim to help clients achieve an outcome that works best for them and their family

If you would like to get more information about mediation and/or make an appointment you can contact NFM direct on 0300 4000 636 or you can contact a NFM family mediation provider in your area.

All services also take referrals from Solicitors, the court or other helping / support agencies.

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