Financial Settlements Nottingham Solicitors  

Financial settlements and financial provision on divorce are still the areas of greatest uncertainty presenting real difficulty for the divorce  lawyer advising clients.

Many of the well publicised recent divorce and financial settlement cases involved what lawyers referred to as “big money” but despite that the guidance given by the Divorce Courts  has been applied to what we may all see as the “average case”.

The Divorce Courts have very wide powers and discretions in adjusting the finances of divorcing couples.  In fact no other Court in England can deprive someone of property in the way that a Divorce Court can and does daily.

The financial orders available on divorce are broadly divided between orders for the husband and wife and those for children.

Children

Dealing very briefly with orders for children, for the time being child maintenance is in the hands of the CSA or its replacement.  The Courts can however still make child maintenance orders by consent.  There are also possibilities for top ups and a school fees order. 

There are other options for financial provision for children such as those under the Children Act 1989 but those are best discussed in individual consultation between solicitor and client.

Financial Provision on Divorce between Husband and Wife

Equality is now considered to be the measure of fairness in distribution of capital assets on divorce.  This sounds simple and family lawyers wish it was.  No sooner is a simple principle formulated than divorce lawyers look for the exceptions to the rule. In this case we refer to reasons for “departure from equality” and the best divorce lawyers are constantly inventing such reasons.

Our object as divorce lawyers as often as not is dealing with cases other than “big money” cases is to meet the needs of both parties and children by the division of inadequate capital and inadequate income.  The result is that major adjustments in lifestyle are inevitably made by both parties.

Agreement or Litigation?

However financial agreements on divorce are reached whether as a result of negotiation between solicitors, mediation or the collaborative law process the statistics are that the vast majority of divorce financial settlements are reached by agreement rather than having to be imposed by a Judge following a fully contested hearing.

The process towards either financial agreement on separation or divorce or litigation always begins with financial disclosure.  Both parties to the marriage are obliged to make full and frank disclosure of their income, assets and liabilities, pensions and to generally proceed in an honest and open manner towards resolution of financial matters.

If negotiations break down an application can be made to the Divorce Court by either party to the marriage and the matter then proceeds to a fairly rigid timetable and in accordance with the Family Proceedings Rules towards a first directions hearing, then a financial dispute resolution appointment when with the help of a Judge the parties are encouraged towards financial settlement and only if all else has failed the case is listed for a final hearing.  The Divorce Court can make interim financial orders such as maintenance pending suit when necessary.

The cost of litigation is a major burden to couples who take the litigation route. There is no single guideline or tariff that can be quoted and each case is assessed individually.  We give the best costs estimates we can at the outset and these may be revised a number of times as a case progresses.  Please refer to our web page headed The Firm where we have clearly stated our hourly rates.

This guide has deliberately avoided going into the case law and becoming a technical lecture on the principles of financial provision on divorce.  We feel that doing so in the space of this web page is dangerous and unhelpful.

As divorce lawyers we deal with each client as an individual and a case can generally be assessed fairly thoroughly in the first interview of no more than 60-90 minutes and at reasonable cost.

If you wish to consult us regarding financial issues on separation please do your homework before coming to see us.  You should prepare a succinct financial dossier including such information as is listed here but please remember – you know your affairs best so use your judgment as to the information and documents that we will need to see.  Also please do a complete photocopy of your dossier for us so that you can leave this with us following our meeting. We prefer not to take your originals.  Whatever we advise you during our meeting will be confirmed by letter.

These are our suggestions only;

Evidence of Income

• If employed the last 3 payslips
• If self-employed your latest accounts
• If there is a family company please bring the last 3 years accounts with details of shareholdings

As to Capital  

• A mortgage statement
• Estimated values of assets including Family home, investments, insurances, endowment policies, ISAS, TESSAS, shares etc
• Schedule of Liabilities
• Latest pension statement

Budget 

• A rough budget for the family unit before and after separation – effectively preparing 2 separate budgets

Short Marriage Cases If there is a pre-marital agreement please include a copy in your dossier.

In every case we need evidence of Identity. 

The Credit Crunch has already had a very noticeable effect on matrimonial settlements on divorce and separation and in a number of ways has made matrimonial settlements more difficult to achieve and to implement once negotiated.The effect has not been uniform across the range of matrimonial cases.The one consistent theme in financial settlements is that they represent a sharing of assets between husband and wife and that sharing has to be achieved either by the realisation of assets, possibly by sales or alternatively by raising capital through borrowing on the strength of assets.

In the average divorce case involving clients of modest means the tightening of credit has had the effect of depressing the property market at a time when property prices were already becoming fairly static and at the same time making it more difficult to utilise a clients borrowing capacity to purchase the interest of the other party in whatever the jointly owned assets might be, as often as not the main item being the matrimonial home.The result is that people cannot move on with their lives and are often trapped in unsatisfactory relationships unable to afford to establish two separate households.

 Our more substantial divorce clients suffer from the tightening of credit but in slightly different ways.Their situation is no different in that they must also realise assets at a time when stock market investments are not performing well and there is increasing talk of a further substantial adjustment in share prices.  In cases where the main asset may be a business ,bankers may be  reluctant to lend in order to finance a directors matrimonial settlement even though those same bankers would be happy to lend to the business to finance its normal commercial activities.

 Almost all matrimonial and divorce settlements are closely tied to residential property.  The residential property focus published by Savills egularly presents a very difficult picture.  Certain hotspots remain desirable with properties still selling whilst other areas appear severely depressed.  The very top end properties with multi-million pound pricetags seemed for a time not to suffer from affordability issues in the same way as the vast majority of residential property in the UK but more recently even this sector of the market has been depressed.

The outlook for the moment has to be seen as remaining difficult. The latest news on mortgage borrowing for 2009 predicts that the banks and building societies will lend no more than 50% of the 2008 mortgage lending and their lending criteria are already  much more stringent.  This translates into a continuing difficult property market and inevitable hardship for many of our clients. 

What can be done? 

The tightening of liquidity has produced an inability to realise assets quickly.  This certainly causes problems but does not mean that our clients must be locked into unhappy relationships indefinitely.  Financial settlements may not be as neat as we might like, there may be loose ends to tie up later and implementation may be partial but nevertheless outcomes can be achieved.  We must simply be a little more creative.

 There are also many cases in which life in the family home has become intolerable for the parties and also for any children.  The unhappiness of the parents inevitably impacts upon the children.  In some cases a separation must be achieved even if one or other of the parties does not wish to leave the family home.  In such cases there is an overlap between the law designed to prevent family abuse and to protect adults and children and the law in which the issues are strictly financial. A little persuasion or even  compulsion by a court order is sometimes necessary.

Despite all of the difficulties in our economy we believe that we can help .

What we can do for you irrespective of any recession;

• We can negotiate financial settlements that are fair to all concerned with the minimum of stress.
• We can litigate through the courts to obtain financial orders if necessary.
• We can obtain the full scope of financial relief appropriate to each case.
• We can act quickly to preserve assets.
• We can extract financial information from people who do not wish to disclose.
• We can be collaborative whenever possible alternatively we will fight your case strenuously and aggressively.
• We can keep a firm hold on reality and the economics of every case.
• We can make the process as stress free as circumstances allow.

Please feel free to contact Claire or John by telephone or email and do look at our related family Law pages.

This e-mail address is being protected from spam bots, you need JavaScript enabled to view it or This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

Telephone : +44 115 958 0584