Resolving the financial issues in divorce (7)
In a formal application for financial orders in UK divorce law all financial information is disclosed by way of Form E. Once any property in dispute has been formally valued and other similar preliminary issues have been dealt with a court will normally list the case for hearing at a Financial Dispute Resolution meeting (‘FDR’ for short). The majority of cases are settled at this appointment by agreement. It is only a minority which fail to settle at an FDR and which need to go to a final hearing before a judge at a later date.
At an FDR appointment both spouses are expected to attend with their lawyers if they have any. The purpose of the appointment is to see whether the parties can be assisted to reach a voluntary agreement. The court expects to see each side make proposals to settle and for the other side to respond and/or make counter proposals. These negotiations do not take place inside the court. They take place outside the court – typically in conference rooms which the courts provide for the purpose. The husband and his lawyer will be in one such conference room and the wife and her lawyer will be in another. The negotiations are typically carried out by the lawyers who then report back to the client.
These appointments often result in agreement for three main reasons.
1. Often one or both parties are represented by a barrister. The barrister often comes to this with a fresh perspective and it may be the first time that the client has received direct advice as to what is reasonable. Since the barrister is the person who has to explain to the court what his/her client’s position is he/she needs to make the client crystallise what he or she is asking from the court. This tends to have a very focusing effect.
2. Because these negotiations do not take place in a court room but outside in conference rooms the court is usually prepared to allow all day for negotiation if necessary. If both parties have a willingness to settle some agreement can usually be reached over a day of negotiations.
3. If the negotiations get stuck the parties can go in to see the judge who will express an opinion. For example, husband may say, ‘I am prepared to offer my wife X’. Wife may say, ‘No, I want Y’. Parties go in before the judge who listens to what they say and then says, ‘If I were the judge hearing this at a final hearing I would be of the view that the wife (or husband’s) view is more likely to be favoured by the court. Now do you want to go out and continue negotiation?’ it is because of input like this by a judge, who is there to express an opinion on any point of dispute if required, that cases often settle at an FDR.
It is important to realise that these appontments are held on a ‘without prejudice’ basis. That means that both sides can be frank but that what they offer or say at an FDR cannot be used later. For instance, one party cannot say at any final hearing, ‘Oh, but you said this at the FDR’. Similarly, the judge who presides at an FDR is then disqualified from acting as the judge at any final hearing. Any such hearing would be before a different judge who would come to the case with no previously formed views.
Most cases do settle at this FDR appointment. In the event that a case does not settle at this appointment the court will list the case for final hearing before a different judge at a later date. At a final hearing the judge will hear evidence from both spouses and any legal argument. He/she will then give judgement and that will be that. Financial issues between the spouses will have been determined once for all. Only a relatively small percentage of cases ever need to go quite that far.
Please continue to find out more about various common situations that arise in ancillary relief applications.
Spouses involved in divorce in England always want to know on what basis the UK divorce law decides financial issues between husband and wife if the Courts have to decide the issue. Indeed, this is what is at the heart of most divorce cases. If there is a dispute it is more likely than not to be about money whether that is about periodical payments for a spouse, dividing the equity in the former matrimonial home or divorce and pensions. In fact, the relevant principles are set out in Section 25 of the Matrimonial Causes Act 1973 which, essentially, reads:-
”It shall be the duty of the court in deciding whether to exercise its powers ….. to have regard to all the circumstances of the cases, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen.
25 (1) It shall be the duty of the court in deciding whether to exercise its powers …. to have regard to all the circumstances of the case including the following matters, that is to say –
(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future;
(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
(c) the standard of living enjoyed by the family before the breakdown of the marriage;
(d) the age of each party to the marriage and the duration of the marriage;
(e) any physical or mental disability of either of the parties to the marriage;
(f) the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family;
(g) …the value to either of the parties to the marriage of any benefit (for example, a pension) which … (by reason of the divorce) ..that party will lose the chance of acquiring;…”
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