Financial Proceedings during Divorce – How does it work?

When it comes to financial proceedings in divorce, court proceedings should be viewed as a step of last resort and the rules now require parties in all but exceptional cases to consider mediation to resolve their dispute first.

The party who wishes to involve the court must first attend a MIAM (Mediation Information and Assessment Meeting) to learn about the mediation process. If mediation is not considered suitable or is unsuccessful, or indeed, it is simply not a course they want to follow, they can then initiate financial proceedings.

In reality, this simply means filling in a form called the Form A through the online portal and paying a court fee. It can be submitted at any time after the divorce application has been filed. After it is received, the court will issue financial proceedings. The party who sends in the form is called the Applicant. The court will then notify the other party, who is called the Respondent. The court will issue directions (Form C) setting out the next steps with a timetable.

The next step is for parties to complete a financial statement (a long form) known as the Form E. You can view the Form E on the court website.

This must be sent to the court and your ex-partner within the time limit stated in the court directions order.

All assets of any nature, income and other relevant matters must be disclosed in the Form E. This includes all properties you have an interest in, all bank accounts, all valuable items you own, all investments, any pensions etc. Substantiating documents must also be attached as set out in a checklist at the end of the form.

The Form E allows the court to have a detailed look at both parties’ finances so that, when it makes a decision, it can be a fair one. Perhaps more importantly, it also puts both parties on an equal footing, allowing them to see what is in the ‘pot’ and hopefully negotiate a settlement thus avoiding the expense and upset of further court proceedings.

It is crucial that you disclose everything in the Form E. If you do not do so, you may be in contempt of court, and this can result in a fine or imprisonment. You can also be penalised by a costs order being made against you.

This form must be completed fully and frankly. At Hanne & Co, our divorce solicitors are experts in financial cases and are able to advise you as to disclosure and complete the Form E on your behalf.

This is the first court hearing. The court will usually schedule this hearing between 12 and 16 weeks after the Form A has been issued to the court. The purpose of the first appointment is to define (and if possible, narrow) the issues in order to save costs.

There is now an obligation on parties to attempt to agree property valuations ahead of the First Appointment and the parties need to agree a composite schedule of assets and income.

It is also possible to use the ‘accelerated process’ and agree the directions without the need for a hearing in more straightforward cases. This means submitting the agreed directions to the court in a particular format, with supporting documents, with a request that the court make an order without attendance. This will save the time and cost of a court hearing

At the hearing the court will look at both parties’ disclosure on their Forms E. It can see what the parties disagree about and how best to resolve the disagreement. For example, the parties may have an asset with a disputed value and the court can make directions that allow this dispute to be resolved (for example, by appointing a joint valuer).

The parties will have already had the opportunity to raise questionnaires in relation to the other party’s disclosure, requesting any necessary or missing information or documentation. If there is a dispute about what questions should be answered, at this hearing the court can direct which must be answered and/or what documents must be produced, and by what date.

The whole purpose of the First Appointment is to make sure that the court, and the parties, have all the information they need to decide the case. The court will make further directions if they determine that it is necessary, or at the request of either party, to ensure all the pertinent information is before the court at the next hearing. For example, if either party has a pension, they might direct a report is prepared by a pension actuary.

If both parties agree (and if they feel they have all the pertinent information) this hearing can be used to negotiate a settlement. The court would have to have advance notice from both parties if this were the case (in a form known as Form G) requesting that the hearing is converted to a longer FDR Hearing (see below) to short-circuit matters. If this is possible it will save time and money.

At Hanne & Co, our specialist family team are able to guide you through the process and ensure that the First Appointment is as productive as possible. Whether this means engaging in early negotiations or pressing for further disclosure from your ex-partner, we are able to help.

As mentioned above, at the First Appointment, the court may order each party to answer any questionnaire raised by the other party. This is aimed at filling in any gaps in the disclosure. For example, one party may not have disclosed all bank accounts, or there may be transactions or assets that require further explanation. The response to the questionnaire is known as Replies to Questionnaire. Once Replies are exchanged, parties are often able to negotiate openly and resolve the dispute without going back to court.

This is a common aspect of financial proceedings, and at Hanne & Co our experienced divorce lawyers are able to advise on and draft appropriate questionnaires to ensure all relevant information is gleaned at the earliest opportunity. This will allow us to make sure your financial claim can be considered fairly and fully and, importantly, that your interests are protected.

The FDR is the second court hearing. The purpose of this hearing is to allow the parties to freely discuss matters and negotiate, with the assistance of the Judge. At an FDR, the court will have both parties’ financial disclosure. You must also give the court details of any offers of settlement that have been made up until that point and both parties are now required to file evidence of their mortgage capacity and housing need by way of sample property particulars.

The judge has a view of the whole case and is able to give an indication to the parties as to the likely outcome at a final hearing. This is only an indication and is not binding. However, it is very useful and gives parties an independent view of their respective positions. Once an indication is given the Judge will then send parties out of court to discuss matters. This may happen repeatedly during the period at court as parties slowly start to edge towards agreement.

The benefit of this hearing is that all discussions are ‘Without Prejudice’ and if negotiations are not successful, they cannot be referred to if the litigation continues to a final contested trial. This means you are not stuck with any concessions made during negotiations and you are free to fight your case fully at the final hearing. As such the Judge hearing the FDR cannot be the judge at any final hearing; the final hearing Judge will know nothing of the without prejudice negotiations or FDR discussions or indications. Many parties reach an agreement at this stage, in which case the Judge is able to endorse it and a binding court order can be obtained.

At Hanne & Co, our family team are highly experienced in preparing for each stage of financial proceedings. We can assist you in all matters including advice, negotiation and representation at court.

Although the majority of cases settle at or before the FDR, some parties are simply unable to reach an agreement. Where parties are unable to agree, the court will list a final hearing where a Judge will make a decision. As stated, this cannot be the Judge who conducted the FDR. Rules require the parties to put open proposals for settlement 21 days after the unsuccessful FDR (in addition to any without prejudice offers they may have made).

The final hearing is a more traditional style hearing, where parties give evidence under oath, answer questions put by the opposing legal representative, barristers give speeches, and the Judge delivers judgement.

At a final hearing the court can order a number of things including, the following

The above is the standard procedure but in some cases there can be unusual or complex features that require more hearings and a deviation from the standard process.

It is always best to deal with as many issues outside of court as possible. However, we recognise that sometimes people just can’t agree. At Hanne & Co, we are able to help. We have one of the largest family departments in London. We can refer to mediation, advise on negotiations, draft final agreements and if all else fails, represent you throughout the court process.

If you would like advice on any aspect of relationship breakdown, please contact our family department for a confidential discussion on 020 7228 0017 or via the form below.