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Finances & Divorce
The Law on Financial matters
Financial matters following a divorce or separation can vary enormously from the simple to the extremely complicated. Ideally an agreement can be reached regarding finances and divorce either between the parties directly or through using a third-party such as solicitors and mediation. Such an agreement can be incorporated in a Court Order which can be presented to the Court for approval by the Judge as the divorce is being finalised. This will have the benefit of being legally binding and enforceable. Any further financial claims will be dismissed or will be limited usually to looking again at maintenance arrangements.
However if an agreement cannot be reached then a secondary application can be made within the divorce under the Matrimonial Causes Act 1973. This is known as financial relief. The Court will require both parties to provide full disclosure of their financial circumstances including details of income and assets. Valuation evidence in relation to assets such as properties or business interests may be required. A pensions expert may be needed to analyse the value and benefits of each party’s pensions. Both parties may wish to raise questions regarding the other parties’ financial disclosure.
Once sufficient financial information is before the Court there will be an expectation on the parties to make proposals to negotiate. The Court will usually hold a special hearing known as a financial dispute resolution hearing or FDR to assist the parties to negotiate. Many finances and divorce cases do settle by agreement at this stage.
If no agreement can be reached the matter will have to be heard at a final hearing. This will involve having to attend Court to give evidence and be questioned by the other party’s legal representative and the Judge. At the end of the hearing the Judge will make a decision based on the evidence and arguments put before the Court.
Further legal advice and assistance may be needed to implement the agreement or if necessary to enforce it if the other party fails to comply with its terms.
The Court will try to achieve fairness that this can be difficult to define as every case is different. The needs of any dependent children will always come first when the Court makes a decision. The starting point will be to consider also if equality i.e. a 50-50 division of all the finances is appropriate but this is often departed from if other more important factors have to be taken into account. It is important to remember that the Judge has a wide discretion and different judges can deal with the same circumstances in different ways.
The Court has wide powers and can order the payment of maintenance, orders can be made for the transfer or sale of properties, orders can be made for the payment of lump sums by one party to the other and orders can be made in relation to pensions.
How to fund a Financial case:
On 1st April 2013 access to public funding (formerly known as legal aid) changed and the Legal Aid Agency no longer offers public funding for many financial disputes arising out of a divorce.
In certain cases Legal aid may still be available. However eligibility is subject to very strict criteria and will only be available if the case is regarded as exceptional or there is evidence of domestic violence.
However eligibility is subject to very strict criteria and will only be available if the case is regarded as exceptional or there is evidence of domestic violence/risk of harm to a relevant child or children.
As a firm we do not offer Legal Aid.
If Legal aid is not available then the work carried out in relation to advice and assistance regarding financial matters will be charged on a time spent basis meaning that the client will be charged depending on the amount of work undertaken to deal with the specific case.
A fixed fee may be available in certain circumstances for example if you are simply looking for advice regarding the preparation of a document.
In all other cases the solicitor dealing with the financial matter will be able to advise on the estimated costs of the proceedings based upon the anticipated amount of work required in each particular case.