Financial settlements during divorce

Both parties are under a duty to provide full and frank disclosure of their financial circumstances to include details of any capital assets, including savings and investments, liabilities such as loans and credit cards, pension transfer values and income from all sources. A mutual exchange of financial disclosure can take place either within mediation or through Solicitors to enable some negotiations to take place. This allows us to determine the assets of the marriage.

Once an agreement has been reached, this will need to be placed into a Consent Order to make the agreement legally binding upon both parties. The Consent Order is submitted to the court, together with a short financial summary form for the Judge to consider whether the agreement reached is fair and reasonable in the circumstances. The factors which the court will consider when determining whether an agreement is fair are those under s25 Matrimonial Causes Act 1973,as follows:-

(1) The court will have regard to all the circumstances of the case, with first consideration being given to the welfare of any child of the family who has not yet attained the age of eighteen;

(2) The court shall, in particular, have regard to the following matters—

(a)  The income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire;

(b)  The financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;

(c)  The standard of living enjoyed by the family before the breakdown of the marriage;

(d) The ages of each party to the marriage and the duration of the marriage;

(e) Any physical or mental disability of either of the parties to the marriage;

(f) The contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;

(g)  The conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it;

(h)  In the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.

It is important to note that whilst there is reference to the conduct of the parties at paragraph s25(2)(g), conduct in financial proceedings must be gross and obvious and of a nature that would be inequitable for the court to disregard. The test for conduct in financial remedy cases is extremely high and therefore, any party raising conduct must have evidence to show that the conduct has had a significant financial impact upon them.

Another important factor to consider is to ensure that divorce proceedings are commenced as early as possible as any financial settlement cannot be made legally binding until the divorce has reached the Conditional Order stage.

 We offer fixed fee appointments to discuss the likely outcome of any financial settlement and how best to approach negotiations. Our fixed fees range between £150.00 and £220 plus VAT for an hour’s advice, which is followed up in writing. Please contact our reception team on 0115 9454555 to discuss this further.

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