Financial arrangements between spouses are frequently a matter of intense disagreement. It is often far more complex than the divorce itself. The settling of financial matters on divorce used to be called ancillary relief and has been renamed to financial remedy. The main piece of legislation governing the area is the Matrimonial Causes Act 1973.
What orders can the court make?
Periodical payments order: These can be made in favour of a spouse or children. They can be made on the application of one spouse. During the course of the divorce proceedings they are described as maintenance pending suit or interim orders. After the divorce proceedings they are called periodical payments orders. They can be for a set period of time or can run until the occurrence of a certain event or further order of the court. Maintenance orders in respect of a spouse will cease automatically when the receiving spouse remarries and in respect of children will normally end when they attain the age of 18 years or cease full time education, whichever is the later.
Lump sum orders: These allow the court to make an order for payment of a lump sum of money from one spouse to the other. The court cannot make an order for a payment of a lump sum to a third party.
Property adjustment order: The court can make an order for sale or transfer in respect of any item of property, although this is most usually used in respect of the former matrimonial home. The court has to take into account third party interests when making such an order.
Pension orders: The court can make orders in respect of pensions depending on the circumstances of the case. These orders allow either for the pension to be split between the spouses or for an attachment provision to be made in respect of the pension. This is a complicated area for which we can provide specialist advice tailored to the facts of your case.
How do you decide what is a fair division of the assets?
The court and the parties have to consider the criteria set out in Section 25 of the Matrimonial Causes Act and apply them to the circumstances of the case. The criteria are:-
- The welfare of a child of the family;
- The income, earning capacity, property and resources of each party;
- The financial needs, obligations and responsibilities of each party;
- Standard of living prior to breakdown of marriage;
- Duration of marriage and the parties ages;
- Disabilities of the parties;
- Contribution made by each person to the welfare of the family including looking after the home and bringing up the children;
- Conduct of each party but only if it is so serious that it would be unfair to ignore it; and
- Any serious disadvantage to either person which will be caused by ending the marriage.
How does the court apply these criteria?
The court has to look at each factor and see how it applies to the individual facts of your case. The court is looking for a fair distribution of the assets, which may not necessarily be an equal distribution. The court has to consider all the Section 25 criteria to decide how the assets should be divided. They must then consider whether or not this is an equal division. If it is not an equal division, they have to justify why it is not equal. Sometimes the needs of the parties result in an equal solution, especially when resources are limited.
How long does it take to settle these matters?
Where there is agreement as to the financial arrangements, matters can be settled by completion of a separation agreement or a court order within proceedings fairly quickly. A negotiated or contested case is likely to take longer. Mediated settlements can take weeks or months to conclude depending on the particular circumstances involved. A court application will normally take up to 12 months from the date the application is made at the court, unless complications arise.
Is there no alternative to going to court?
Negotiations can take place at many levels without involving the court. These can be direct between the separated couple, through their legal representatives and/or with the help of a mediator. Many cases are settled without a contested court process.