Often, when couples think about getting divorced, they do not realise that financial matters are dealt with separately to the divorce process itself.
Once a Conditional Order has been received within the divorce, the Court has the power to make a Financial Order. The financial claims that parties have over one another by virtue of their marriage are not dismissed by simply completing the divorce process. A Financial Clean Break Order is required to dismiss these claims and formally record any financial settlement agreement. This is very important because, unless clean break order has dismissed the financial claims, they can be brought long after the divorce is concluded and, by then, one or more of the parties’ financial circumstances may be very different from how the were at the time of the divorce.
The Court encourages parties to reach agreement themselves regarding finances if possible, hence the requirement to attempt mediation before you can apply to formally go through court proceedings for a Financial Order. If an agreement can be reached, whether between the parties independently, or through mediation, or negotiations through the parties’ respective solicitors, it is important that this agreement is recorded within a Consent Order.
Consent Orders are a Financial Order that records the agreement parties have reached themselves, as opposed to what the Court has decided for them within proceedings. Depending on the nature of the agreement reached between the parties, the Consent Order can make provision for a variety of financial orders, including lump sum payments, property adjustment orders (including the sale of properties), pension provision and maintenance payments. If parties reach agreement themselves, without the assistance of a solicitor, or through mediation, it is important to seek advice from a solicitor on whether the agreement reached is fair, before the Consent Order is prepared.
Once the draft Consent Order has been prepared, approved and signed by both parties, it will be filed at the court along with a Statement of Information form which will detail the parties respective financial details, including their income, interests in any property, other capital, liabilities and pension valuations. The parties will not be expected to provide supporting documents, but they have a duty not to mislead the Court and they will have to sign a Statement of Truth confirming the information provided is correct. The Court will consider whether the agreement represents fair financial provision for the parties, meeting their respective needs in the circumstances of the case. If the Court is satisfied that the agreement reached is fair, the Consent Order will then be sealed. If the judge is not satisfied that the agreement is fair, queries will likely be raised.
Consent Orders are legally binding and can be enforced if one of the parties were to breach it. Often, the Consent Order will provide for a clean break which bars either party from making any further claim on the other’s assets in life and in death. The Court is under a duty to consider whether a clean break can be made, although this may not be possible in situations where an order for spousal maintenance is appropriate.
At Fisher Jones Greenwood, our team of family law experts have a wealth of experience in dealing with financial matters on divorce and provide clear advice to guide you through this process. If you know anyone would like advice, please contact our Family Team by calling 01206 700113 or contact us.