By Rachel Lemon, Partner in the Family team
As the UK’s negotiations to leave the EU continue to be difficult and the option of a “no deal” Brexit is considered, Rachel Lemon explores the option of a “no deal” divorce and negotiating a financial settlement in Mediation.
The divorce process itself is relatively simple. It is an exchange of paperwork between the couple and the court which ends with the court granting the Decree Absolute, the document that brings the marriage to an end on a final basis.
But, what about the finances? It is not an uncommon assumption for clients to make that once divorced neither can make a financial claim against the other. Unfortunately, whilst that would keep things simple, that is not the case.
The financial claims established between the couple on marriage remain “live”. That means that either party could make a claim against the other for capital, income or pensions despite the fact that the marriage itself has been brought to an end.
So, whilst it is an option to leave the finances, to be resolved later, it is not, generally speaking, a recommended way forward. It is usually better to have certainty by agreeing the financial arrangements before the divorce is finalised. The agreement is then incorporated into a financial Order (which is then approved by the Court) dismissing the relevant claims between the parties.
Sorting out the finances on divorce can require some negotiation. It will be important that the children, if there are any, are provided for and each spouse’s needs are met. Other factors, such as dealing with assets acquired before marriage, may also be a consideration.
In order for there to be effective negotiations, clear information about the finances must be provided by each spouse so that both can “come to the table” with confidence. If there are doubts as to what there is, then it is unlikely that both spouses will feel able to commit to an agreement dividing the assets.
Once everyone knows what there is, then it is time to negotiate. To try to negotiate a deal without information is to do so blindly which can have its risks.
Once at this stage, it is important that negotiations are managed carefully, sensitively and in a timely fashion.
Often the relationship between the couple is already strained. Most couples will want the process of divorce and the associated financial arrangements to be dealt with promptly. It can be a painful process, for a wide range of reasons.
The process of Mediation is quicker and cheaper than a court process. It seeks to empower the couple, to keep a dialogue going or re-establish it if it has been lost. The Mediator facilitates the couple’s discussions and guides those towards a settlement. In doing so a safe place to explore options and talk about the way forward is provided. Space and time is given for emotion but in a managed environment so it does not become the focus of discussions.
Mediation supports the couple in projecting into a future which can feel unsure, uncertain and frightening for some. Some of these elements can sometimes be lost in the court process as each spouse adopts a position and view points become entrenched. It can then take a bold move, by either spouse, to move away from that position and the risk of losing face then becomes a consideration.
If the negotiations in a family setting were as they have been, and continue to be, in relation to Brexit, all hope of preserving any sort of relationship, albeit on separate paths moving forwards, would have disappeared, long ago. Thankfully, with the right support, negotiations towards a financial settlement on divorce do not need to be long, drawn out and hard fought.
The contents of this update are intended as guidance for readers. It can be no substitute for specific advice. Consequently we cannot accept responsibility for this information, errors or matters affected by subsequent changes in the law, or the content of any website referred to in this update. © Mundays LLP 2018.