DIY divorces and the importance of a financial order
Victoria Emens explores steps for a divorcing couple achieving a financial settlement to obtain the court’s approval
Most legal practitioners have welcomed the more amicable way of obtaining a divorce following the introduction of the Divorce, Dissolution and Separation Act 2020 which came into force on April 6 2022. The online divorce portal has been running for almost three years (with its ups and downs) and is in frequent use both by litigants in person and solicitors alike.
It is now more important than ever to encourage and advise those clients starting a ‘DIY’ divorce or dissolution at home to address their financial settlement by way of a Financial Remedy Consent Order in conjunction with the divorce or dissolution proceedings.
We all frequently encounter the client who has amicably agreed on a financial settlement directly with their spouse at home ‘around the kitchen table’, often without the benefit of legal advice or in the absence of full and frank financial disclosure.
When we take on cases or speak to new enquiries with this background, potential clients should be informed on how important it is to obtain legal advice on a potential settlement to ensure it meets their needs and is likely to receive the court’s approval.
Divorcing couples should be advised any ‘home style’ agreement reached is set out in a legally binding Financial Remedy Consent Order, which will address the division of those key areas of capital, pensions and income.
Those in practice will be aware it will be necessary for financial disclosure to be provided by both parties for the solicitor to be able to give full legal advice on a settlement. Financial disclosure is most preferable via the court Form E/Financial statement or by a schedule of agreed financial documents.
It is advisable to highlight to the client that full financial disclosure is the best and safest approach so the parties and their legal representatives can obtain a full picture of the nature, value and extent of the matrimonial assets and the financial positions of the parties. In doing this, it can be established if a potential settlement meets the needs of your client, is fair and within the range of orders that the court is likely to approve, and which are not simply ‘rubber stamped’ by a judge.
If a client wishes to forgo the process of full financial disclosure and proceed by way of D81 form only, a signed indemnity or disclaimer should be obtained from them highlighting:
· that full financial disclosure has not been provided in the matter.
· the advice given was without the benefit of full disclosure.
· that the client has been made aware of the potential unfairness of any settlement but has nonetheless decided against obtaining full financial disclosure and wishes to proceed with a financial remedy order on a draft and execute basis only.
If an agreement on the division of matrimonial assets is reached but never embodied in an order, or if the assets of the marriage are simply divided up without an order in place, the parties' financial claims against one another will simply be left open indefinitely. This is because the decree absolute or financial order does not dismiss their financial claims.
Even in cases where there are no significant assets, it is essential to have a clean break Financial Remedy Consent Order in place. Furthermore, clients should be informed of the risks of not having an order in place, pointing out that this could result in costly litigation later down the line which could have been avoided had the finances been addressed earlier and within the divorce and dissolution proceedings.
If matters are amicable and all agreed, it can be emphasised to clients that legal costs should not be excessive and is ‘money well spent’ with the Financial Remedy Consent Order giving your client that all important peace of mind while providing them with financial security for the future.
Victoria Emens is an associate at RWK Goodman rwkgoodman.com