Either spouse can begin financial proceedings once divorce proceedings have been initiated. This is both in respect of a divorce on marriage civil partnership dissolution or proceedings for judicial separation.
A financial order cannot be approved until the first stage of the divorce under new rules known as the conditional order has been granted or known as the decree nisi if divorce proceedings were issued before 6th April 2022.
It is standard practice to wait until the financial order has been finalised before applying for the final stage of the divorce, the final divorce order as it is known under the new rules or decree absolute if divorce proceedings issued before 6th April 2022, as the existence of the divorce may affect pension rights, tax and inheritance.
If an agreement cannot be reached between the parties without court proceedings, one party will have to apply to the court to resolve the financial matters. This does not mean that a settlement cannot be reached at a later stage as an agreement between the parties can occur at any time before a decision is made by a judge at the conclusion of the proceedings known as the final hearing.
The majority of cases are settled usually by agreement at an earlier stage and before either party can issue court proceedings in respect of financial matters, that party must attend a mediation information and assessment meeting, which is known as a “MIAM”.
At this meeting, the mediator explains the benefits of mediation. The mediator will also make an initial assessment as to the suitability of the case for mediation. There are some exemptions for needing to attend mediation which include domestic abuse.
Once a party issues financial proceedings at court, a timetable will be put in place for each party to provide details of their financial positions together with supporting documentary evidence, along with a date for the first directions hearing. This application form is known as a Form A and will incur a court fee.
The proceedings will be allocated to a local Family Court, or to the Central Family Court in London. If there are significant assets and complexity, the financial proceedings might then be transferred to the High Court and dealt with by a High Court Judge.
First Hearing known as First Appointment (FA)
The first hearing is known as a first appointment (FA) and should ordinarily be heard between 12 and 16 weeks from the date of lodging the Form A. The FA is a short hearing designed to make sure that the court has sufficient evidence in order to determine the matter and move the case forward.
No final order will be made by the judge at this hearing, but the parties are expected to attend.
Before the first appointment, the parties are required to provide full and frank disclosure and raise any queries in respect of the others disclosure. Both parties will produce a financial statement known as a form E at least 35 days before the first appointment.
The parties’ relevant financial documents must accompany the form E and these include 12 months of statements for each bank account they hold or have an interest, mortgage statements, pension’s valuations, share certificates, P60, 3 months’ payslips and; 2 years of Tax Returns and business accounts, if applicable. The parties exchange these documents and raise any further questions they may have.
Whilst the disclosure process cannot be avoided, if all matters relating to the further questions can be agreed prior to the first appointment, then attendance at court for the first appointment could be used more effectively and could become the next hearing known as the Financial Dispute Resolution (FDR)
Should the hearing be a FA, at the hearing the court will also list the case for a second hearing known as a financial dispute resolution hearing, commonly referred as an FDR, 4 to 6 months later.
After the FA, and prior to the FDR, the parties will answer the other’s questions raised on their disclosure.
By the date of the FDR, all of the relevant information as regards to the income, assets and liabilities should be clear so that the judge can provide an opinion as to the likely outcome of the proceedings.
Both parties must attend the FDR. It will take place at court and the hearing is designed to encourage the parties to settle. The judge will not make findings of fact in respect of any disputed issues or allegations or make any final order without the agreement of both parties.
The parties engage in negotiations throughout the day and generally is an effective process and most cases are settled at, or shortly after, this hearing.
If an agreement is reached, it is drafted into a court order known as a consent order which is signed by the parties and sent to the court to be approved. Once it is sealed by the court the financial proceedings are concluded; the order is legally binding and can be enforced if one party does not comply with its terms.
If the financial proceedings are not settled at the FDR, the court will list the proceedings for a final hearing. This is usually listed to be heard approximately 6 to 9 months after the FDR.
The court will also make further directions setting out any additional evidence required, and what is required for preparation of the hear generally.
If the financial proceedings require a final hearing, the judge will hear all of the evidence before making a decision on the matter. If the parties are able to be sensible and willing to compromise on matters between themselves rather than leave it to a judge to decide, this is often a better option as it’s an agreement they can live with and not a decision imposed on them by the court.
The length of the final hearing will generally depend on its complexity and issues. It will normally take place over 2 to 5 days. This will have a significant impact on the legal costs incurred by both parties, and the legal costs increase as the case progresses so settling matters between them at an earlier stage will reduce the substantial legal fees likely if the matter proceeds to the final hearing.
Reaching settlement sooner rather than later is key to resolving matters quickly and most cost effectively.
We have a team of specialist family lawyers that can help you with the divorce, finances, children and any other family law issues that may need to be resolved as you progress through the divorce.