Whenever anyone thinks about financial planning through divorce, one of their first thoughts will be that it will be expensive.

But does that have to be true?

It’s inevitable that there will be costs associated with divorce, and that assets will usually be divided between the parties.

However, there are many steps that can be taken through financial planning to minimise the costs..

Practical steps to take when your marriage breaks down

There are a number of practical steps that you can take that will help you get through the divorce.

Firstly, you should close all joint accounts, and separate your finances from those of your spouse, as far as possible. Obviously, if a joint account remains open then your spouse can drain it, including any money that you deposited into it.

Secondly, gather together details and paperwork in relation to all of your assets (including pensions) and liabilities. This will help you fully understand your financial position, and you will have to disclose these details.

Thirdly, make a budget. This will help get you through the divorce, and beyond. The budget will tell you your financial needs, which will be a vital piece of information when the financial settlement is decided.

Lastly, refrain from making any major financial commitments, until the divorce settlement is finalised. You may find that you will not be able to afford those commitments.

Preventing sale or re-mortgaging of matrimonial home

In most divorces the matrimonial home is the most valuable asset, and its value will usually be divided between the parties. Obviously, you will want to protect the asset, pending finalisation of the divorce settlement.

This is not a problem if the home is owned by you and your spouse jointly, as your spouse cannot deal with the property without your agreement.

But what if your spouse is the sole owner of the property?

You have a right to occupy the matrimonial home, even if your spouse is the sole owner. You can protect that right by registering a notice of home rights at the Land Registry. This will also effectively prevent your spouse from selling or re-mortgaging the property, as the buyer or lender would not proceed with the transaction until the notice is removed.

Saving on fees

Various fees are likely to be incurred in the course of the divorce, from court fees to expert’s fees.

The amount of these fees can be quite substantial. There is currently a £593 court fee to issue the divorce application.

A simple way to save on these fees through financial planning is to share them with your spouse.

The divorce application can now be made jointly by both spouses, and they can agree to share the court fee.

Similarly expert fees can be shared, by the parties agreeing to instruct a joint expert, and to be bound by the expert’s valuation.

Take advice!

It is essential that you take expert legal advice. Obviously, the advice will cost money, but it may save you far more in the long run.

For example, good advice will help you to avoid unrealistic expectations, or arguing matters that will not be relevant to the outcome, such as the reasons for the marriage breakdown. If you have a good idea of what you may be entitled to, and avoid arguing over irrelevant matters, then you are likely to make smart financial planning decisions and to make a substantial saving on costs.

You may also need to take financial advice, for example in relation to pensions. Your lawyer will be able to put you in touch with a financial adviser.

Agree matters!

Matters can be agreed with your spouse directly, through solicitors, or with the help of out of court solutions, such as family mediation and collaborative family law.

Note that before you can agree matters both parties will have to make full disclosure of their means, so that everyone knows what is at issue. It is therefore best to make this disclosure as quickly as possible.

If you can’t agree matters, consider arbitration, whereby the parties agree to have their case decided by a trained arbitrator, and to be bound by the arbitrator’s decision. This can be far cheaper than contested court proceedings.

How much does a divorce cost?

There is of course no answer to this. The amount that the divorce costs will ultimately depend upon the issues involved, and upon the parties. As indicated above, if they are able to agree matters then the costs will be relatively little. On the other hand, if they argue about all matters then the costs will quickly skyrocket.

How can we help?

For further information on how we can help, please see our Divorce Finances page.

Walker Family Law is an award-winning family law practice, recognised as one of the leading family law firms in the South West of England with services covering family law mediationdivorce lawchild-law and arbitration.

Please contact us if you require any further information.

The popular media is full of stories about high profile divorce cases, often involving celebrities, and almost all involving huge sums of money.

And even the law reports of financial remedy cases largely comprise big money cases, as only couples with substantial assets can afford to get involved in expensive contested court proceedings.

Anyone reading these stories and reports can be forgiven for getting the false impression that such cases are the norm in our family courts.

But new research has shown that that is far from true.Research shows most couples have only modest assets to share on divorce

Fair Shares

The research project, entitled Fair Shares, which was led by the University of Bristol and funded by the Nuffield Foundation, surveyed 2,415 recent divorcees, providing the first representative picture in England and Wales of the financial and property arrangements that couples make when they divorce.

And the findings of the research were both surprising and worrying.

Perhaps the most surprising finding was just how little many couples have to share on divorce.

Far from the millions that we see in most reported cases, the research found that of those divorcees surveyed the median value of their total asset pool, including the net value of the former matrimonial home and any pensions, was only £135,000.

And nearly a fifth of those surveyed had no assets at all to share on divorce.

How much were divorcees left with?

Perhaps it should not be surprising given how modest the assets could be, but the research found that the majority of divorcees left the marriage with under £50,000 by way of assets.

A fifth of divorcees ended up with less than £25,000, and a quarter ended up with nothing or only debts.

Only one in 11 came out of the marriage with £500,000 or more.

So much for big money divorces.

The research also found that equal division of the assets, if any, was not the norm, with only 28% of divorcees reporting that they had divided their assets roughly equally. In some cases there was an unequal division simply because the assets were divided in accordance with who owned what.

And a particularly worrying finding was that only 11% of cases involved sharing of pensions, suggesting that many people were missing out on their pension entitlement. The main reasons given for so few pension sharing cases were general lack of interest in the pension, and a strong sense that it ‘belonged’ to the spouse who had been contributing to it.

Lack of legal advice and help

And that brings us to the last finding of the research: how few couples sought legal advice and help in sorting out their financial and property arrangements.

One of the most important things a lawyer will do before advising a client upon their entitlement in a divorce settlement is ascertain the value of the assets. Obviously, without this information it is impossible to know what a fair settlement is.

But the research found that over half of divorcees who had reached a financial arrangement had done so by themselves, only a third made use of lawyers to sort out their financial arrangements, and 12% had sought no advice at all.

It is therefore unsurprising that the research also found that over a third of divorcees did not know the value of their own pension pot, 10% of homeowners with a mortgage did not know what the equity in their home had been, and 38% of divorcees felt their knowledge of their ex-spouse’s finances during the marriage was not good.

The main reason for not seeking legal help was of course fear of the cost. However, the amounts spent on legal help were relatively low. A quarter of divorcees had had to find less than £1,000, with a further 18% having costs between £1,000 and £2,999. Only 9% had costs of £10,000 or more, with higher costs associated with greater wealth.

The message from all of this is quite clear: whilst assets may be modest, it is still worth seeking legal advice, as the cost involved can be far outweighed by the value of an entitlement that you may be missing out on.

How can we help?

For further information on how we can help, please see our Divorce, Separation, and Finances page.

Walker Family Law is an award-winning family law practice, recognised as one of the leading family law firms in the South West of England with services covering family law & mediationdivorce lawchild-law and arbitration.

Please contact us if you require any further information

Obviously it is often the case that one party to a marriage will have significantly more assets than the other, which they have acquired before the marriage. But will this have a bearing upon the financial settlement in the event of a subsequent divorce?

The answer is: it may have an effect, depending upon the circumstances.

If, for example, it is a long marriage and the assets that one party acquPerson unpacking moving boxesired before the marriage have become ‘mixed’ with the other assets, then it may have little or no effect.

Take, for example, the situation where in a long marriage one party owned a house before the marriage, but that house is sold and the proceeds are then used by both parties. It may then be difficult to subsequently identify the original value of the house separately from the joint assets.

In such a situation the fact that one party owned assets prior to the marriage may have little or no bearing upon the financial settlement.

Matrimonial property

But often it will be possible to identify assets owned prior to the marriage, or at least to ascertain the value of those assets, and take them into account in the divorce settlement.

So what is the approach of the courts in such a situation?

To answer this, we need to consider the concept of ‘matrimonial property’.

In brief, assets acquired during the marriage, through the joint efforts of the parties to the marriage, are known as ‘matrimonial property’, and therefore fall to be divided between the parties on divorce.

Other assets, such as assets acquired before the marriage, inheritances or gifts to one party, and assets acquired by a party after the separation are considered to be ‘non-matrimonial’, and will therefore remain the property of the party who owns them.

But there is an exception to this. Where the matrimonial property is insufficient to meet the needs of one party then the court can ‘dip into’ the non-matrimonial assets, in order to meet those needs.

Unfair to share assets owned before the marriage

The way that all of this works can be demonstrated by a 2011 High Court case.

In the case the parties were married in 1993, at which time the husband had assets of just over £2 million.

The marriage broke down in 2009. At that time the total assets were worth about £9.7 million.

Divorce proceedings ensued, and the wife argued that the assets should be divided equally. She also claimed that she required half of the assets to meet her needs.

The husband argued that he should be entitled to more than half, in the light of the assets that he brought into the marriage. He did not, in fact, seek to recover all of the money he brought into the marriage, but just asked for a division that would give the wife 43% of the assets, leaving him with £1.37 more than her.

Considering the case, the judge concluded that it would be wrong and unfair for none of the assets owned by the husband before the marriage to be excluded from the general principle that assets should be shared equally.

The question, therefore, was: how much should be excluded?

Taking into account the fact that the marriage was quite long and the assets that the husband had brought into the marriage had well and truly mingled with marital funds, the judge decided that an appropriate figure would be £1 million.

The result of this was that the wife received about 45% of the assets, and the husband about 55%.

That still left the matter of the wife’s needs.

The judge concluded that 45% of the assets would be enough to meet the wife’s needs. There would therefore be no further adjustment in the wife’s favour, although it should be said that the judge did not exclude more than £1 million, as he considered that that would not leave enough to meet the wife’s needs.

How can we help?

For further information, please see the Divorce Finances page.

Walker Family Law is an award-winning family law practice, recognised as one of the leading family law firms in the South West of England with services covering family law & mediationdivorce lawchild-law and arbitration.

Please contact us if you require any further information

Whether a financial settlement on divorce is agreed or ordered by the Court both parties will first have to make full and frank disclosure of their means.

The duty of full disclosure in financial remedy proceedings

The reason is obvious: the settlement is based upon the available assets, and the incomes of the parties – without this information it is impossible to determine what a reasonable settlement will be.

So if the parties wish to settle the matter by agreement and one of them fails to make full disclosure then it will not be possible to reach an agreement.

And if the matter goes to Court the Court will require both parties to make full disclosure.

So what might happen if they do not? How can the Court decide a settlement without details of one party’s means?

A newly published Family Court judgment provides the answer.

Flagrant breach of the duty of disclosure

The judgment concerned the final hearing of a wife’s financial remedies application. What made the case particularly difficult was the behaviour of the husband, as the judge explained:

“The problem that this case throws up is how the Court should deal with a respondent husband who has been dishonest throughout, has failed to comply with Court orders, has failed to provide relevant financial information and documentation, has flagrantly breached undertakings given to the Court, and who has given no encouragement to others with relevant information to assist the process. Indeed, an email has surfaced indicating that he was taking steps from many years ago to put assets beyond the reach of his wife. Because of his actions, I do not have a complete picture and I will have to consider how I should draw inferences and what inferences I should draw on the basis of the information that I do have. It is right to record this is one of the most flagrant breaches of the duty of full and frank disclosure that has come before the Courts.”

And there is the answer to the question: without full details of one party’s means the Court will have to draw inferences as to their assets, on the basis of the information available. This process is commonly referred to as drawing adverse inferences.

Before we go into that we should quickly look at what each party was asking the Court to order.

The wife asked the Court to find that the sums that had passed through the husband’s hands, and that had disappeared, were of the order of £5.5 million (although they were probably substantially more), and she essentially asked the Court to award her a lump sum for half of that amount.

On the other hand, the husband claimed that he had no assets, and therefore asked the Court to make a ‘clean break’ order, with no provision for the wife.

What are adverse inferences?

So how does the Court go about drawing adverse inferences?

As the judge explained, a finding of non-disclosure is established by either: (1) direct evidence of an asset which the alleged non‑disclosure has not revealed; and/or: (2) failure to comply with Court orders or provide adequate responses to questions from which failure the Court feels able to draw adverse inferences; and/or: (3) evidence of lifestyle wholly inconsistent with the disclosed resources.

In this case, all three of these propositions applied. There was clear evidence that the husband had removed assets, he had failed to comply with Court orders requiring him to provide information regarding his assets, and he was currently living abroad, with no visible means of support.

Having found that the husband had failed to disclose assets the Court then had to assess their value.

This all came down to the evidence of the parties. And the judge had no hesitation in accepting the wife’s version of events, i.e. that there were assets worth at least £5.5 million.

Accordingly, the judge decided that the wife was entitled to everything she had requested.

What is the cost penalty for litigation misconduct?

So the wife fully succeeded in her claim. And there is another thing that may cause the husband to regret his actions, albeit not mentioned in the case report.

In financial remedy proceedings, the Court will not normally make any order requiring one party to pay the other party’s costs. However, it may do so where it considers it appropriate, because of the conduct of a party in relation to the proceedings, known as litigation misconduct.

Here, the wife would most likely have incurred a not inconsiderable amount of costs pursuing her claim, particularly given the husband’s failure to cooperate in the proceedings.

And the Court would certainly have been justified in ordering the husband to pay those costs, or at least a substantial proportion of them. Whether such an order was made we do not know, but certainly anyone tempted to conduct their case in the way the husband did here would do well to know that they risk having a costs order made against them.

How We Can Help

Ian Walker Family Law & Mediation Solicitors are award-winning family solicitors and are recognised as one of the leading family law firms in the South West of England with services covering family law & mediation, divorce, child law, and arbitration. Please contact the team to speak to one of our specialist solicitors.

_MG_5336How successful is family mediation?

It is impossible to know for Non-Legally Aided Mediation. There are no central and independently audited statistics.

What the Legal Aid Agency Mediation statistics show

There are statistics for Legally Aided Mediation though.

The outcomes of legally aided mediations are audited by the Legal Aid Agency. If success is over claimed, the Legal Aid Agency will disallow the success fee that is otherwise paid. If there was a pattern for this happening – then there would be sanctions under the terms of the Legal Aid Contract.

We can therefore say that the Legal Aid Agency statistics are reasonably reliable.

The latest round of statistics have recently been published

Here is a table:Legal Aid Mediation Statistics 2017

The Legal Aid Agency say:

Family mediation can be used to resolve issues to do with children or property and finance following divorce or separation, and the ‘all issues’ category describes mediations which deal with both areas.

The children category consistently accounts for the majority of starts, comprising 64% of all mediation starts in the last year (this information is taken from the more detailed data published alongside this bulletin).

Mediations can either break down or result in an agreement.

Like other areas of mediation, agreements fell following LASPO. They have since stabilised at just over half of pre-LASPO levels (see figure 16).

Mediations in the ‘all issues’ category can reach full agreement, where agreement is reached on all issues, or partial agreement, wherein an agreement has been reached on either children or property and finance, but not both. As such, successful agreements include both partial agreements and full agreements.

Over the last year 62% of all mediation outcomes involved successful agreements. The rate of success varied between different categories of mediation, with the highest proportion of agreements (63%) in the children category (this information is taken from the more detailed data published alongside this bulletin).

What do the figures tell us?

 There is a lot less Legally Aided Mediation taking place than before the legal aid reforms which were supposed to promote mediation: 15000 ish down to around 8000 ish per year (the 2016-2017 were down so far from 2015-2016)

A greater proportion of mediation is about children issues and this is more successful than financial mediation

Success within these figures also includes partially successful. This is most likely to be where children issues have been resolved and financial issues have not.

If around 40% of mediation is unsuccessful – the failure rate for financial mediation will be higher – this is because success includes partial success. What this is most likely to mean is a failure to resolve financial issues but that there has been success in resolving child arrangements. As in my experience many couples tend to focus on one area of dispute, resolving children issues when finances are in dispute tends to be more straightforward.

40% failure rate means that nothing has been resolved at all.

The proportion of successful mediation is no better now than before the legal aid changes – why is this? 64% successful in 2006/7, 68% success in 2007/8, 66% success in 2012/13.  Arguably the previous legal aid rules pulled even more contact cases into mediation.

Lets have a look at success rates in more detail…

There are more detailed statistics published Mediation Stats ChartMediation success statitistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

These charts are for the most recent full calendar year.

The overall success rate in finance only mediation is only 54%

When both finances and children issues are considered in mediation financial issues are resolved in only 51% of cases. Children issues are resolved in 60% of those cases.

Points to note/Questions

  • To have a legally aid contract for mediation a mediation service needs to have an experienced mediator working in the service and overseeing its mediators
  • Any mediator can undertake non legally aided mediation. Inexperienced mediators are likely to have higher failure rates.
  • If experienced and quality assessed mediators are more successful at children mediation than simpler financial cases – can we realistically think that they will be any better at more complicated financial cases – with multiple properties and significant pensions and other assets?
  • The normal family mediation model is only moderately successful in simpler financial cases – is it really suited for more complex cases?
  • There are a lot of mediations that break down – where to the cases go… largely to Court…where else can they go? which means the cost of mediation was wasted.
  • is a 54%  success rate for mediation in financial cases acceptable?
  • is a 63-ish% success rate in children cases acceptable? More so than finances certainly.
  • The help that mediation provides in successful cases shouldn’t be underestimated – this is a lot of families assisted to find a better way… but …
  • Couples entering mediation are ones where the couple want to mediate, they want to find solutions, and the mediator has assessed that there is a reasonable prospect of success. The failed cases shouldn’t be regarded as hopeless cases. The hopeless cases will already have been filtered out.

Our View

  • Mediation can be very difficult to set up – clients (often rightly) worry about whether the other is truly willing to negotiate, and sometimes they struggle themselves with the idea that they may have to compromise.
  • Sometimes mediation is undermined by solicitors. For example – I had one recent case as a solicitor where my client agreed resolution in mediation and shook hands – yet the other party’s solicitor immediately sought to renegotiate (despite her client having received advice in support of the mediation process). In the end my client paid some more to avoid litigation costs and because he had had enough. The mediator would count their work as a success – but this didn’t tell the whole story. In another case (financial) , as a mediator; I sent a couple off to get legal advice and a pension report and some legal advice. I was contacted some time later to sign the mediator part of the court application. They hadn’t obtained the pension report, but they had continued (unsuccessfully) negotiation via round table meetings and with counsel. The mediation had not broken down when I had last seen them – so why had they not come back?
  • The traditional family mediation model (mediator and clients in a 3 way meeting – with legal advice between meetings) struggles with financial cases and is best suited to children cases.
  • For financial cases it is often better to involve solicitors – but this means moving to a shuttle model with each team in different rooms. As a mediator who is also a Civil Commercial Mediator the different style of civil mediation is better suited to more complex and involved cases – including where professionals are involved. Involving Solicitors means that the mediation is less likely to unravel afterwards.
  • But no mediation can guarantee success. It cannot – because both sides are free to walk away – that is both a strength and a weakness. The voluntary nature of mediation helps because the couple are choosing to find a solution. It is their commitment. But there can clearly be no guarantees.
  • What can achieve 100% of decisions is going to Court! But this is very expensive and divisive. But Court decisions are not necessarily long term solutions
  • What can also achieve a 100% decisions – but at less cost by combining mediation with arbitration
  • Arbitration is another type of dispute resolution where a private judge (the arbitrator) is engaged. Arbitration is a flexible process which is much quicker than Court. There is a lot about it our website.
  • Under our mediation with arbitration scheme – if a mediated agreement cannot be achieved – then the case moves seamlessly into arbitration where an arbitrator (a private judge) makes a legally binding decision. But the process will be less divisive and perhaps 1/3 of the cost of a court process and much quicker – there is much more about all this on my website at https://walkerfamilylaw.co.uk/solicitor-led-family-mediation/mediation-arbitration-scheme/ Many of the benefits of mediation are retained because the couple are also choosing together to arbitrate if the mediation fails. It is therefore a voluntary process with a binding outcome. This has to be the way forward… combining the benefits of negotiation with the certainty that there can be a quick outcome if the mediation fails.
  • But the better model for mediation for finance cases is the civil model – which is purer and less emotive negotiation which involves solicitors better.

Is a 54% -ish success rate for financial mediation acceptable? You can see why people are wary – particularly when money is tight – but Court is rarely the answer. We think that our combination of mediation with arbitration provides the best option.

If you want to see the legal aid data look here https://www.gov.uk/government/statistics/legal-aid-statistics-october-to-december-2016

Should clients be put off  trying mediation?

No – remember overall 62% of cases were resolved. Resolution would have saved clients a lot of cost and should also have preserved or improved family relationships.

But – prospective clients need to be realistic – mediation is no magic wand.

For mediation to work, clients need to fully commit to the process and deliver on commitments made during the process. They must be prepared to have some give and take.

Perhaps also clients need to be more selective in their choice of mediator?

What are the mediators skills and background. Personally I always refer my clients to specific experienced mediators who are either practicing solicitors or who are non-practicing solicitors. But – I think my model of linking my mediation practice to a panel of arbitrators who are known to me is the way to go (although unfortunately legal aid is not available for arbitration – although if the matters still unresolved at the end of a mediation are reasonably narrow then a paper based arbitration can be inexpensive and certainly cheaper than the alternative)

Me – Family Law Solicitor/Family Mediator/Civil Mediator/Arbitrator

I have been a Family Mediator since 1996 and am a supervisor of other mediators. I am accredited by the Family Mediation Council and the Law Society. I am also a Civil/Commercial Mediator and member of the Devon and Somerset Mediation Panel. I am a Family Law Arbitrator (Children Scheme) via IFLA and I am a practicing Solicitor with Accreditations via the Law Society and Resolution.

In other words I am quadruple qualified.

This means I am aware of the pros and cons of all relevant practice models and am well placed to comment.

I have been undertaking legally aided mediation for nearly 20 years. I have my own Solicitors practice based in Honiton but covering Taunton and Exeter. Our Mediation with Arbitration scheme is portable to anywhere within a reasonable travel distance…

But, all this means that I understand how the different styles of practice work – and don’t work – and perhaps also how they can best work together…

Are we the right Family Law Solicitors or Family Mediators for you?

What follows is a short piece which formed the basis of our Advert in East Devon’s Midweek Herald Newspaper in January 2014.

We regularly advertise in the Midweek Herald because it is a free newspaper that is delivered to homes in Honiton, Seaton, Axminster, Colyton, Beer and Ottery St Mary. It can also be found in Sidmouth. Our main office is in Honiton, although we are also able to see clients by appointment at our branch offices in Exeter and Taunton, so the Midweek Herald is a natural place to advertise. As an East Devon resident, Ian has been reading the Midweek Herald for quite a number of years.

Family Law and Mediation Experts in East Devon

Ian Walker has been a specialist Family Law Solicitor since 1992 and a Family Mediator since 1996. Ian has worked for Solicitors Practices recognised as amongst the best in the South West. Ian has a long commitment to good Practice and has served as a Member of the Family Law Committee of the Law Society, which promotes good practice and Law Reform. (more…)

Ian Walker
Ian Walker – Founder/ Director/ Solicitor/ Mediator/ Arbitrator

23 Questions to ask when preparing for mediation – Ian Walker

To get the most out of mediation, it is worthwhile prepare. Here are some questions to ask yourself in advance;

  1. What do you want to achieve? List your objectives in order of priority.
  2. What do you think the other person wants to achieve? List their objectives in order of priority.
  3. What do you think would make a realistic solution?
  4. What can you do to help the other person achieve what they want, and help them to help you to achieve what you want?
  5. When offering things, what can you realistically deliver? (more…)

Don’ts first; here are 10 things not to do;

  1. Don’t use your children to get at the other person. You are both better than that. Remember, you are a role model for your children. They need to see their parents resolving problems in a sensible and constructive way.
  2. Don’t make threats to, or cause harassment to the other person. It will only make things worse. It will take longer and be more expensive to sort things out.
  3. Don’t think you are going to take the other person “to the cleaners”. That’s not going to happen. The law is about fining fair solutions. You will both get a fair outcome. There are a range of “fair” outcomes. There can be different views about what “fair” is, but the “battleground” is fairly narrow
  4. Don’t try to hide money or assets. The chances are they will be found. Your costs and the overall costs in the case will be more. (more…)