Family Department Fact Sheet
Step by Step guide to Financial Applications to Court
This document provides general guidance regarding an application to court to resolve your financial arrangements on divorce or dissolution. Your family lawyer will be able to provide specific advice based on your circumstances.
What follows is a basic outline of the Financial Application procedure so that you are aware of what will be happening each step of the way. We charge fixed fees for financial proceedings which are set out on Fixed Fee Information Sheet: Financial Proceedings. A fee is charged for each separate stage.
This is the first stage in considering separation of finances following a separation. This will involve discussion of the options, consideration of the financial disclosure and negotiation with the other party or their solicitors to try and reach agreement.
A referral will need to be made to mediation if negotiation does not result in agreement. The mediation service will arrange separate initial meetings for both parties to attend called Mediation Information and Assessment meetings (MIAM). After this meeting the mediation service will determine whether the issues are suitable to mediate, and if so, arrange a mediation meeting. This can be a joint meeting between both parties, with a mediator present, or shuttled mediation, where both parties remain in separate rooms with the mediator going between the two. Full financial disclosure is exchanged and the mediator will encourage negotiation and suggest ways to resolve the issues. There are usually 3 mediation meetings, but there can be more or less, depending on the circumstances. If an agreement can be reached, the mediator will then draw up a memorandum of understanding which both parties will be asked to agree and sign. This can then be given to a solicitor who will draw this into a consent order.
If agreement cannot be reached following financial disclosure and negotiation, or at mediation, then either party may ask the court to decide how their finances should be divided by making an order. These proceedings are called ‘Financial Relief Proceedings’.
Once an application for financial relief is sent to Court, the Court will set a timetable for the proceedings which sets out what needs to be filed when and gives a date for the first directions appointment (FDA) which is the first court hearing.
Each party has to prepare a written financial statement, known as a Form E. These statements contain detailed information about your financial circumstances and require evidence such as bank / building society statements, pay slips, valuations, and accounts to be attached. The statements have to be exchanged no later than 35 days before the first Court appointment. The statement has to be accompanied by a signed statement of truth, which means that you are making a solemn promise to the Court and the other party that you have told the truth in the statement.
It is beneficial to begin getting together the documentation which needs to be attached to Form E as soon as possible. See Family Department Fact Sheet: Financial Disclosure and Form E.
Once complete, these are sent to the Court and to the other party. Following the exchange of Form E’s, each party considers whether further questions need to be answered or further documents are required to determine the actual issues in the case.
Before the FDA, each party must prepare and send to the other party and to Court a statement of Issues in the case, a chronology setting out the important dates during the marriage / civil partnership, a questionnaire seeking any further necessary information and documentation and a statement of the legal costs incurred to date.
You will need to attend the appointment along with your solicitor. The appointment is held in private with a District Judge in Chambers and is usually 45 minutes to an hour. The District Judge will consider which questionnaires need to be answered, what further documents need to be produced and any other matters that need to be dealt with i.e. valuations of property or expert evidence. The District Judge will also “direct” how the case should be dealt with and timetable things like the filing of further documents. At this appointment the District Judge will give no indication about how he or she believes the matter should be settled, and instead it is usual for the matter to be listed for a Financial Dispute Resolution hearing (FDRH) or, in exceptional circumstances i.e. non-cooperation from a party, listed immediately for a Final Hearing.
If the issues are not agreed via negotiation or at the FDA, a Financial Dispute Resolution Hearing (FDRH) is listed. Further documents will need to be prepared for this hearing. Before the hearing each party has to prepare their answers to the other party’s questionnaires and provide any outstanding financial evidence. Property and pension valuations are usually received and expert evidence, if applicable. Once all the evidence is received, consideration will again be given to whether the issues can be agreed without the need to attend Court. If this is not possible, the FDRH will proceed.
Before the FDRH, each party must prepare and send to the other party and to Court an updated statement of Issues in the case, an updated chronology setting out the important dates, a schedule of the assets and liabilities, confirmation of housing needs and mortgage ability and a statement of the legal costs incurred to date.
This follows the same procedure as the FDA, in that it will be held in private before a District Judge in Chambers. However, on this occasion more time will be allocated and discussions will take place prior to the hearing between solicitors to try and achieve a settlement. The FDR is a ‘without prejudice’ hearing, which means each of you is able to make proposals for settlement that cannot be referred to openly in court afterwards.
The FDR hearing is usually between an hour and an hour and a half long, but you will need to be prepared to spend the full day at court and much of that time may be spent discussing a possible agreement outside the courtroom. At this appointment the District Judge will explore all the issues and try and steer the parties towards an agreement. The Judge’s role is to try and guide the parties towards a realistic settlement, and the Judge may well give an indication of how he or she thinks that the case should be settled. If the parties are still unable to agree terms, then the Judge will not make an order about how the finances should be shared at this hearing and instead will direct that the matter proceeds to a Final Hearing.
The Final Hearing will be heard by a different Judge than the Judge who conducted the FDRH appointment. Therefore, this Judge will not be aware of any of the discussions which took place at previous appointments.
Before the Final Hearing, each party must send to the other party and to the Court their proposals to settle the matter.
At the Hearing you will be represented by a solicitor or a barrister and you will be called to give evidence, as will the other party, and will be cross-examined. Experts may be also asked to come to Court to give evidence. The Judge will consider all of the evidence given orally at Court and the evidence in the Court bundle, and then make a final decision, giving reasons for doing so.
It is worth remembering that proceeding to a Final Hearing will have cost implications and it is therefore beneficial to fully engage in negotiations with a view to resolving the matter and achieving an amicable settlement prior to a Final Hearing.
Even if court proceedings for financial relief have started, they can be stopped if the parties reach an agreement. Most cases end in this way avoiding a final court hearing which would increase both tension between the parties and emotional and financial costs. It is also possible for the parties to agree terms of settlement that a Court would not be able to impose upon them. This means that an agreed settlement can be very flexible and is more likely to fit the circumstances of the case with both parties feeling that they have had a say.
Any agreement or Court order obtained by fraud or where there has not been full and frank disclosure is open to later challenge. The Court will not hesitate to set aside any order obtained in such circumstances. The dishonest party may have to bear all the legal costs involved and may also be prosecuted for perjury. Honesty really is the best policy.
Either spouse or civil partner can make an application to court to resolve financial disputes arising from divorce or civil partnership dissolution. The person making the application is the applicant, and the other person is the respondent.
The court follows the legal principles from legislation and case law in making its decision, although each judge has discretion to do what they perceive to be appropriate on the evidence in each particular case. This means the precise outcome of financial court proceedings can be quite difficult to predict.
The statutory principles are set out in section 25 of the Matrimonial Causes Act 1973 and Part 5 of Schedule 5 to the Civil Partnership Act 2004. The court’s first consideration is the welfare of any children involved. Alongside that, when determining an appropriate division of resources, the court considers:
- each person’s income, earning capacity, property and other financial resources, available now or in the foreseeable future
- each person’s financial needs, obligations and responsibilities relevant now or in the foreseeable future
- the standard of living enjoyed by the family before the breakdown of the marriage
- each person’s age and the length of the marriage
- any physical or mental disability
- contributions made, or likely to be made in the foreseeable future, to the welfare of the family, including any non-economic contribution
- the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it (although it is rare for conduct to be taken into account and the reason for the marriage or civil partnership breakdown is very unlikely to be a conduct issue for the purposes of a financial application), and
- the value of each of the parties to the marriage or civil partnership of any benefit which that party will lose the chance of acquiring
Other principles have become part of the law through the decisions of senior judges in case law. These dictate that, among other things, the decision the court makes must be fair, considering each party’s needs and the sharing of any wealth above that which fulfils each party’s reasonable needs.
When dividing assets, the court will measure the end result against a benchmark 50/50 asset split to assess whether anything other than that is justified. In some cases, one person’s (or the children’s) needs will require a higher proportion of the capital assets, for example, for housing, or sometimes the court’s order may reflect that one person came into the marriage with significantly greater assets than the other.
In certain circumstances, an agreement made before or during the marriage (a pre-nuptial or post-nuptial agreement) can also have a significant effect on what the court decides.
The court can make financial orders to divide up assets and income. The court’s powers apply to all property in which either or both of you have an interest (which may also, in certain circumstances, include assets in companies or trusts). Orders the court can make include:
- an order for the sale of a property, a transfer of a property to one person (or to a child) or an order to put a property into a trust—in some cases it may be appropriate for one of the parties to receive their share of a property at a later date, for example, when any children have reached the age of 18 or completed their education
- an order for a sum of money (a lump sum), payable in one sum or by instalments, or by a series of lump sums, for example, to pay off a mortgage
- an order for one party to pay maintenance to the other party, either for the rest of their joint lives/until the recipient remarries or enters into a subsequent civil partnership, or for a fixed period (which can be for either a non-extendable or extendable term)
- less commonly, an order for the educational expenses or special needs of a child, but not usually for general child maintenance, which will be dealt with via the Child Maintenance Service unless agreed between parties, except at higher income levels where the court can make a ‘top-up’ order, and
- an order that a pension be shared, or attached sharing, is where pension funds are transferred or split between the parties, creating two separate pension schemes, and a pension attachment order is like maintenance direct from a pension, but can also be a lump sum
However, as mentioned, in very few cases will the outcome be an order made by the court at a final hearing, and most parties will reach an agreement with the assistance of their family lawyer prior to that stage.
Note: The above is intended as a general overview for your information. It is NOT intended to replace proper legal advice. Each case is different, and advice cannot be given without a proper analysis of your own circumstances. (May 2023)
