Resolving financial issues in family disputes
As a family lawyer I have advised clients for over 15 years and seen a number of different trends and ways in which disputes are dealt with when there is any form of family separation or divorce.
These disputes are often focused on the division of matrimonial assets, arrangements for children, or in situations where parties are not married, negotiations about assets that are held jointly and claims that may be made against these. The legal position for unmarried and married couples is very different, and different again if an unmarried couple have children. However, in any of these scenarios the way in which matters can be resolved can be simplified into a number of options, the relevance of which will really depend on the issues, complexity and personalities involved.
1. Direct Negotiation
In some situations both parties come to an agreement on their own, and establish how they wish to divide assets and deal with the financial consequences of their separation. Having had financial advice and legal advice, and both understanding the consequences of their decision, lawyers can then draft these agreements into either separation agreements, consent orders within divorce proceedings or property transfers depending upon the nature of the agreement. Parenting plans can also be drawn up to deal with the arrangements for the children.
If parties wish to reach an amicable solution, family mediation is often recommended by legal professionals as a way to try to reach an agreement on points of dispute. Family mediators meet with both parties (lawyers do not need to attend) to facilitate discussions with the hope of negotiating settlements after full financial disclosure.
Mediators are impartial and the process confidential, enabling the parties to discuss and progress ideas, concepts and options in the mediation space that they may not feel comfortable doing otherwise.
Mediation can avoid the costs and stress of Court proceedings. While Mediation is voluntary, at the conclusion a without prejudice, memorandum of understanding and a financial summary can be prepared by the mediator. This can then be endorsed into a Court Order, if the parties agree.
3. Solicitor Negotiation
Sometimes clients do not feel comfortable meeting with their former spouse/partner face-to-face and instead prefer solicitors to deal with the negotiation of the consequences of the breakdown of the relationship. This is predominantly the case where communication has deteriorated significantly or there are risks and concerns about power imbalances between the parties.
Solicitor-led negotiation is a way for the legal advisers to negotiate either through correspondence, or a series of without prejudice round table meetings. This option can enable the parties to secure an agreement that is reasonable to them both and can be endorsed into a Court Order.
4. Collaborative Law
The collaborative process offers an alternative to mediation or court for clients. Both parties must instruct a collaboratively trained lawyer and sign participation agreements.
The parties and lawyers will attend a series of meetings where advice is provided to achieve a settlement that meets the needs of both parties without having to go to court. If agreements are reached, these can be enforced into a Court Order.
If the above options are not suitable, or do not reach the resolution necessary to bring all matters to a conclusion, it is possible for parties to instruct an arbitrator. An arbitrator can adjudicate and give a binding judgment on specific points or all of the issues in dispute.
An arbitrator is employed by the clients and funded privately outside of the Court process. They produce a binding arbitration decision which is then drafted into a Court Order. The benefit of arbitration is often the confidentiality and timetabling of the process and ability to select an arbitrator agreed on between the parties, unlike the court process where the judge selection and availability of the court is outside of our control.
6. Early intervention
In some situations it is sensible and possible to have a voluntary negotiation hearing which attempts to see whether matters can be negotiated before a privately employed “Judge”. This early intervention tries to resolve issues before Court proceedings become protracted and enables resolution of discreet issues or all matters depending on the issues in dispute.
7. Court proceedings
Unfortunately in some situations none of the alternative dispute resolution methods mentioned are suitable or successful and in those situations Court proceedings may become necessary.
If this is the case, the Court will set a timetable and series of steps and actions that the parties must take, leading to a series of court hearings. The court process will require financial disclosure and possibly the appointment of single joint experts. Each party would be advised by their own solicitor through this process, with barrister representation at court hearings where appropriate.
Which route is right for each case really depends upon the issues, timescales and complexity. Mediation is now more widely used than in the past as it provides a cost proportionate alternative to solicitor negotiation. How long each process takes will depend on the circumstances, but the court process can take much longer than the other options outlined.
I am able to assist clients through all of these alternative methods, and am an accredited family mediator able to conduct mediations on all family issues. It is always my preference to try to reach resolution without the need for Court proceedings, in an effort to deal with matters quickly and cost-effectively for my clients. However, this is not always possible and in some situations using the alternative dispute resolution methods are required.
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This article has been compiled by Freeths LLP in association with Wren Sterling, the Financial Conduct Authority does not regulate legal services.