Financial Remedy Proceedings Guide
Divorce and civil partnership dissolution can be a highly stressful time for those involved. Organising years of finances in a separation can be an overwhelming task and often disagreements will arise even between partners who are on good terms with each other.
In cases where you’re finding it hard to come to a financial agreement, financial remedy proceedings can help you find a resolution.
What is a Financial Remedy Order?
A financial remedy order is an order is made at the end of the financial remedy proceedings. A financial remedy order sets out the terms of what has been agreed between the couple during the financial remedy proceedings. Alternatively, if an agreement has not been reached between the couple before the final hearing the court can order for a financial remedy order. Financial remedy proceedings are designed so that the couple can settle during one of the stages of the process. However, if the parties do not reach an agreement by the third and final court hearing, the judge will make a final decision on the couples’ behalf.
Contents of a Financial Remedy Order
The contents of a financial remedy order depend on the financial position of the couple. A financial remedy order often includes:
- Property Adjustment Order – This is an order in relation to the property and can provide for a sale or transfer or a property.
- Pension Orders – This can include a pension sharing order or a pension sharing attachment order.
- Periodical Payment Orders – this order is for spousal or child maintenance.
- Clean Break Orders – this is an order to confirm there is a clean break, therefore confirming that the court is not making any order in relation to a particular asset.
Step-by-Step Guide to Financial Remedy Proceedings
What Will the Court Consider in a Financial Remedy Proceeding?
When deciding what financial remedy order is appropriate, the court will consider all circumstances of the case. As is in all family court cases, the welfare of children under the age of 18 will be at the forefront of decision making. Additionally, the court will consider the factors set out at section 25 of the Matrimonial Causes Act 1973 (in the event of divorce). Furthermore, they will consider Schedule 5, Part 5, paragraph 21 of the Civil Partnership Act 2004 (in the event of dissolution).
The court considers the following:
- Income, earning capacity, property, and other financial resources each of the parties has or is likely to have in the foreseeable future. This includes any earnings increase which the court deems reasonable to expect a party to take steps to achieve.
- The financial needs, obligations, and responsibilities which each party has or is likely to have in the foreseeable future.
- The standard of living familiar to the parties before the breakdown of marriage or civil partnership breakdown.
- Any physical or mental disabilities of either party.
- The contributions each party makes or is likely to make in the foreseeable future to ensure the welfare of the family. This includes contributions to look after the home or caring for the family.
- If the conduct of one of the parties is unjust the court would disregard it.
- The value of each party to the marriage of civil partnership of any benefit which through divorce or dissolution that person will lose the chance of acquiring.
Step 1: Pre-Court Procedure and Mediation
Before requesting an application for financial remedy proceedings, it’s important for the parties to consider resolving the matter without need to take it to court. It is a requirement that couples who wish to engage in court proceedings first seek Mediation Information and an Assessment Meeting (MIAM). During this meeting, one person from the couple will attend a meeting with a mediator who will assess whether their case is suitable for mediation. In some situations, mediation will not be a suitable route for a couple to take. Examples of this can be when there has been domestic abuse in the relationship or because the financial assets are complex. Therefore, for some couples it is best to take legal advice upon the terms of the agreement.
If the mediator believes that the case needs to be escalated to the courts, they will sign a certificate to issue the application for a financial order. If the mediator believes the case is suitable for mediation, they will discuss this with you potentially invite you and the other person to attend mediation together.
It’s important to note that although MIAM is a requirement, mediation is not a requirement for reaching remedy order.
Once you have attended MIAM, your solicitor will prepare Form A, the application for a financial remedy order.
Step 2: The First Appointment
Shortly after issuing Form A, you will receive a Notice of First Appointment. The document outlines the steps that will need to take place before the first court hearing (known as the first appointment).
Before the first appointment you will need to complete a Form E. This is a document that sets out each person’s assets, liabilities, income, outgoings, and other relevant financial considerations. Once the parties complete the forms, they exchange them.
As a result, each party will then complete additional documents before the court hearing. Documents include a questionnaire of any requests for further information or documentation arising from the other party’s Form E, a chronology of key dates and a summary of the issues of the case.
Where both parties have a legal representative, it is common to seek to agree the directions to progress the case. Therefore, both parties can effectively not proceed with the first appointment hearing itself.
The first appointment is a case management hearing. This means the judge will review the issues in the case to determine if further evidence is needed to progress the case. Common directions given after the first appointment include:
- Replies to questionnaires – the court will review the questionnaires that each party has prepared for the other, following their Form E and assess whether it is appropriate and proportionate for those questions to be answered.
- Valuations of property if the property values are disputed.
- A pension report if appropriate.
- Valuations of other assets such as companies.
If the couple can agree upon the above directions on paper, attendance at the first appointment may not be necessary. Therefore, the court can instead deal with the matter on paper.
Step 3: Financial Dispute Resolution Hearing (FDR)
The FDR is a negotiation hearing, taking place without prejudice basis. The goal of the FDR is to reach an agreement. By the time a couple reaches FDR it should be very clear what the assets are. Therefore, it is for the parties to seek to try and reach an agreement if possible.
Most cases come to an agreement either at FDR or shortly after due to the effectiveness of FDR. In FDR the judge will provide an indication on what the outcome of the case might be. Through providing an indication, the judge provides their view on each parties’ proposals. As a result, the indication assists in the couple reaching an agreement.
In addition, it is becoming increasingly common for couples to have private dispute resolution hearings rather than a court led FDR. This option is preferable for many couples as they can choose which judge to instruct, the location, the time, and the date of the private FDR. Furthermore, it allows for a private “judge” who will have more time to assist the couple in coming to an agreement. As a result, for couple who have high value assets, or the assets are complex a private FDR can be a good option and provide confidentiality and privacy.
Step 4: Final Hearing
Most cases do not require a final hearing because they resolve before reaching this point.
After an unsuccessful FDR, it is common for there to be a pre-trial review hearing. During this hearing the court will assess if they require any further evidence or reports before entering the final hearing.
During the final hearing, the court may hear oral evidence from either person or if there are any other points in dispute may also hear evidence from some of the experts that have been ordered. For example, a pension actuary or a surveyor.
At the final hearing the court will take into consideration the factors above to aid in deciding a financial remedy order.
Once the court approves the financial remedy order it becomes legally binding.
Expert Guidance from Family Law Solicitors
Financial remedy proceedings can be a difficult area of law to navigate. Therefore, it’s important to seek legal guidance from an expert family law solicitor, specialising in financial remedy proceedings. Our solicitors can find the best route for you, assessing the options of mediation and arbitration.
For advice regarding financial remedy proceedings, please get in contact with our team of family law solicitors.
All advice is correct at time of publication.