Don’t take it E-asy
Divorce law hit the headlines a number of times in 2015, and managed a final appearance in December, when an error on what is known as the “Form E” on the Ministry of Justice (MOJ) website came to light. Media claimed that “thousands” of divorce settlements could be affected, but what is the fuss all about?
Regular readers of our articles will be aware that the law places considerable importance on financial disclosure and understanding what assets are involved. Parties have a very serious obligation to inform each other, and the court, of the extent of their finances. Deals concluded without this (where deliberate or inadvertent) can be picked apart.
To assist with this task, the Form E was created. It is often used in negotiations to settle finances where the court is not involved.
The Form is a schedule where both parties have to set out the full extent of their finances. This includes (but is not limited to) property, bank accounts, investments, pensions, income and debts. The Form contains a summary page which adds up all the assets, and deducts the debts, to give a net overall figure for capital assets and separately for income from all sources.
Debts were where the problem arose with the MOJ form. A software error meant that the debts were disregarded, meaning that those who utilised the Form had a summary page showing an artificially higher net figure than was the case. This means settlements may have been based on inaccurate figures, and thus may need to be looked at again.
So what will the impact be?
The number of settlements affected is not yet known, and the MOJ has issued a short statement on its website.
However, those who instructed solicitors are unlikely to be affected. Almost invariably, solicitors do not use the Form E from the MOJ website, and use a Form from a specialist legal software supplier, unaffected by the error. Consequently, they rarely rely on the Form E summary and will instead create their own bespoke schedule of assets, so avoiding the error. A decent practitioner will check and re-check the maths before finalising the Form E!
For those settlements that did use the MOJ Form E, those that are affected are likely to be limited to those where the failure to properly account for debts significantly distorted the true position. A failure to take account of a credit card debt of a couple of hundred pounds is far less significant than bank loans running into thousands.
Ultimately though, each case will turn on its own facts and it has the potential to re-open the door for many who thought their cases were concluded.
If you are concerned that your settlement may have been affected by this error, or are engaged in court proceedings and the MOJ Form E has been utilised by you or your spouse, you should contact a solicitor as soon as possible to evaluate the situation.
You can also find out more information on the family pages of our website on all of these options. The family team at Whitehead Monckton have a wealth of experience providing guidance and advice in all areas relating to separation or divorce. If you wish to discuss any of the points raised in this article, please contact a member of the Family team.