What financial orders can a court make in connection with a divorce?

The Court has the jurisdiction to make Orders for Financial Remedies on the grant of a decree of divorce, nullity or judicial separation. The Family Practice Rules 2010 define “Financial Order” as including all or any of the following:-

• An Avoidance of Disposition Order
• An Order for Maintenance pending Suit;
• An Order for Maintenance pending outcome of the proceedings;
• An Order for Periodical payments or Lump sum provision both in respect of divorce and civil partnership;
• Property Adjustment Order;
• Variation Order;
• A Pension-Sharing Order;
• A Pension-Sharing Compensation Order

These Orders need some explanation and we are happy to discuss any of these remedies with you. When the Court makes an Order, it is perfectly possible for it to make a number of Orders at the same time, in a Final Order.

When can an application for a financial remedy be brought?

An Application for Financial Remedies may be made at the same time as the Application for a Matrimonial Order or at any time after that Application has been made. The Court, however, has no power to make Orders until the Decree Nisi has been granted. The Orders of the Court will then not take effect until Decree Absolute has been granted i.e. when the marriage is finally dissolved. The Matrimonial Causes Act 1973, Section 28, makes provisions relating to continuing provision Orders. Periodical Payment Orders may not be expressed to begin before the date of the Application. Also, other than where a child over the age of 18 is in education or has special needs, no financial provision may be made in respect of a child has reached 18 years of age. Periodical payments Orders to or for a child will cease upon the death of the party paying.

How are these applications decided?

If agreement is not reached between the parties, a Court will decide how financial issues between the parties ought to be resolved. It is the case that no standard formula exists for calculating appropriate provision. Like in many other areas of law, it will depend upon the particular circumstances of the case. The factors, however, to be taken into account remain those set out in Section 25 of the MCA 1973. By way of example only, the factors include the following:-

• The income, earning capacity, property and other financial resources of both parties;
• The financial needs, obligations and responsibilities of both parties including those which are likely to arise in the near future;
• The standard of living enjoyed by the parties during the course of their marriage;
• Age of the parties and the duration of the marriage;
• Any health issues;
• Contributions made by either/both parties.

It shall be the duty of the Court “…….to have regard to all the circumstances of the case.” It must therefore look at any circumstances it feels are relevant to the financial issues being considered.

It should be noted that the conduct of either party will rarely be a factor in the consideration of financial remedies, unless it is, as they say, “inequitable to ignore it.” In other words, the starting point is that conduct (e.g. adultery) is irrelevant in considering a Financial Application.

How do I apply for a financial remedy prior to the final hearing?

An Application for Financial Remedies comes within the Pre-Action Protocol for mediation information and Assessment. Accordingly, before an Application is brought, generally the Applicant ought to contact a Family Mediator to arrange attendance at an information meeting about family mediation and/or other forms of dispute resolution. Evidence of compliance will then be lodged with the Application, when ultimately made. Mediation must at least have been considered, though there is compulsion to attend.

Every effort should then, in any event, be made to settle rather than to litigate.

Once the Application is initiated, and a Petitioner in a divorce would generally be advised to leave all possible Application in, rather than excluding any, Form A is filed with the Court. Once that is filed, an initial hearing (FA) will be ordered by the Court some 12 – 16 weeks from the filing date. Before this initial hearing, there needs to be simultaneous exchange of financial information by both parties. This is on Form E. This must be completed, served and filed not less than 35 days before the FA. Attached to Form E must be the supporting documents as evidence. Not later than 14 days before the FA each party must file and serve on the other party a concise Statement of Issues, a chronology, a request for further documents if required (or not) and a Notice in Form G stating whether either party will be in a position to use some or all of the FA as a Financial Dispute Resolution hearing.

In addition, if possible, the parties should file with the Court a summary of what is agreed between them and details of any specific directions they require including any experts they wish to appoint.

No later than 14 days prior to the FA, the Applicant must file and serve confirmation that relevant Notice Provisions have been complied with (eg notice on a mortgagee).

A party with pension rights must request relevant valuation information within seven days of receiving a date of the FA.

Both parties must come to the FA with an estimate of their costs to date on Form H.

Both parties must attend the FA unless excused by the Court.

Every effort should be made to negotiate agreed terms, wherever possible. It avoids costs, if nothing else.

The next hearing is the FDR. Its aim is to achieve a settlement through disclosure and negotiation. It is the opportunity to put to the District Judge their fundamental positions. To this end, not later than seven days beforehand, Applicants must file at court details of all or any offers, with all or any responses of any nature. Both parties must generally attend the FDR. These hearings are heard in private. The process is referred to as “judicially assisted conciliation or negotiation.” The Judge is likely to express his or her own view, though this is not binding on any Judge deciding matters at the Final Hearing. This Judge must be a different Judge to the Judge who has been present at the FDR and his observations at the FDR are private. The purpose of the FDR therefore is to narrow down the issues and demonstrate to both parties what a Judge on a Final Hearing is likely to do. Every encouragement is given to settle the case.

What happens after the FDR?

If a case does not settle, it will go to a Final Hearing. Once called Ancillary relief, it is now referred to Financial remedies Application.

After the FDR, Bundles must be prepared known as Trial Bundles divided into particular categories of documents.

There should be a short up to date summary of the background to the case. There ought to be a Statement of Issues. There will then be included a position summary of each party. There should be a chronology and skeleton arguments by both parties setting out their arguments in broad terms.

The Final Hearing usually takes place before a District Judge (except in the more complex cases where a more senior Judge can sit). Even if there is an Agreement, it ought to be referred to the Judge for his approval, which is still required. Both parties generally give oral evidence and others may be called to give evidence If a valuation is not, for example, agreed, a valuer may well be called. The Applicant calls evidence, is cross-examined, followed by the Respondent who is then similarly subject to cross-examination too.

Generally closing speeches will be made by or on behalf of the applicant, followed by the Respondent last.

The general rule now is that there will be no order as to costs. Costs orders, however, can be made at any stage and will more likely be made where there has been a failure to comply with the rules or a direction. Conduct might be a factor more generally on the issue of costs. There is a checklist in r.28.3(7). The only offers that can affect costs are totally open offers.