Ancillary Relief – The process of divorce financial proceedings
When a couple divorce, not only do they need to determine who will live with the children but they will also need to consider the finances and how they will be distributed. The process of splitting the assets is called Ancillary Relief. Ancillary relief in divorce refers to financial proceedings or orders that can be sought following the start of divorce proceedings. The person who first initiates the proceedings is called the Applicant and the person receiving them is called the Respondent.
Before starting a claim, you will usually need to attend a Mediation meeting or MIAM (Mediation Information and Assessment Meeting) where you can discuss your case with a trained independent mediator with, or without, your former partner present. If mediation is unsuitable or unsuccessful then you obtain a MIAM certificate and can then issue an application, Form A, to initiate the financial proceedings. The Form A starts the timetable.
After this, you will be required to complete a Form E, which is a financial disclosure document required by the court for both parties to complete. This collates your financial circumstances into one document. Any disclosure that has been missed will be questioned by either party in the Questionnaire on the Form E which will collate any missing disclosure. If some time has passed after the completion of your Form E and your financial circumstances have changed, then providing update disclosure will be mandatory.
Married couples may have assets they acquired separately or together either during the marriage, before the marriage, during the cohabitation period, or after separation. Assets may be held in one spouse’s name or held jointly between them. For most married couples the largest asset is usually the family home, known as the Former Matrimonial Home (the FMH) in financial proceedings. However, this is not always the case. One spouse may have a high-value pension, or business assets or interests, shares or other investments. Both spouses may be earning similar incomes, or one spouse may be earning significantly more. The other spouse may be focusing on caring for any children and/or the home.
The starting point of the court is to add all assets held by either party in the ‘matrimonial pot’ and split these between the parties on a 50:50 basis. However, the court can depart from the 50:50 starting point depending on a number of factors including children, housing needs, income needs, financial resources, contributions, etc. Every case is different and the aim of the court is to achieve a fair outcome for both parties.
The court can make a range of different orders in respect of any of the assets or income of either of the people going through a divorce. A few examples of the most common types of orders are as follows:
An order for the family home to be sold and net sale proceeds be shared in accordance with a court order;
Other property being sold or transferred into one spouse’s name;
A pension sharing order (more common in longer marriages);
Periodical payments or spousal maintenance – a sum that one spouse must pay to the other spouse for a particular period of time.
These different orders are only suitable for certain cases depending on your circumstances.
The most important part of any divorce is reaching a settlement. Once the Form A has been issued, the court provides the parties with a timetable of when they are to disclose documents and when the first hearing will be.
The first of the three hearings in the court timetable is the First Directions Appointment, or ‘FDA’ for short. In this hearing, the court will consider both parties’ disclosures to establish if any further information is required from either party. There will also be consideration for the almost inevitable property valuations and pension reports, and any other relevant report. The timetable will then be set by the court and the deadlines to allow for a financial settlement to be reached will be set down. You will not need to give evidence at the FDA.
The next Court listing will then be the Financial Dispute Resolution Appointment, or the ‘FDR’ for short. The focus of this hearing is to encourage the parties to reach an agreed financial settlement through judge-led negotiations. Each party must put forward their proposals for settlement. It is on a Without Prejudice basis, meaning that anything said in this hearing cannot be referred to a Judge in future hearings. This allows the parties the freedom to present their best and lowest offers with the aim of reaching a quick settlement and avoiding the delay and legal costs at a further hearing.
Once the Judge has heard the proposals from both sides, he/she will give an indication as to what a likely outcome could be if the case was to proceed to Final Hearing. This will give the parties the opportunity to see the strengths and weaknesses of both cases. There will be time for negotiation then and if the parties reach an agreement, the Judge will approve this in a Consent Order. The Judge at this hearing has no power to impose an order and will only settle matters on an agreed basis. If there is no agreement, the parties will consider further directions, such as further property valuations, further updating disclosure and so on and the Judge will list the matter for a Final Hearing. You do not need to give evidence at the FDR, and the court will not make any findings about disputed facts.
The third and last Court hearing is known as the Final Hearing, as it will bring the proceedings to an end. The Judge at this hearing will make a decision on your financial position and impose a settlement. This may, or may not, be the outcome either party would wish for but the court will see it as just and fair. Prior to this hearing, and as a result of the directions agreed at the FDR appointment, parties will be ordered to complete Open Offers, Section 25 Statements and comply with other disclosure directions.
The Open Offers will set out each party’s settlement proposal, which will be shown to the Judge at the Final Hearing. The Section 25 Statements set out the parties respective position on the matter.
The Final Hearing may last several days. The Applicant’s representative or barrister will begin with providing a submission to the Judge and the Respondent will follow. Cross examination will then take place of both parties. Questions will be asked by the other person’s barrister and the Judge and you will give oral evidence. Witnesses may be required and the same process will apply to them.
Closing submissions will then take place, which will put forward the final comments on each party’s respective case. The Judge will then make his/her final decision and an order will be imposed on both parties.
The cost implications of heading towards a Final Hearing are high and parties should negotiate a settlement wherever possible. From the issue of the Form A all the way to the Final Hearing, parties can agree settlement through negotiations and they are encouraged to do so, which will save costs. Barristers fees are also an inevitable cost of proceeding through the court track and costs of valuations and pension reports, for example, can also add additional costs. This is why we encourage our clients to settle their financial differences without having to go to a final hearing if at all possible.
Our family lawyers in Llandudno and Conwy have a wealth of experience of guiding clients through the divorce process, headed by Phil Kentish in Llandudno. Our family lawyers can help you wherever you are in England and Wales as much of the work can now be done online. If you have any questions about the divorce process and the financial implications, please contact our experienced team of Family lawyers on 01492 874774 (Llandudno) or 01492 596596 (Conwy).
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