Financial Proceedings
The statutory principles of financial proceedings 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 considered 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 starting point is a 50/50 asset split. 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.
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Brief Financial Procedure
Application for financial proceedings to commence Form A plus £255 fee
First Directions Appointment (FDA) set and basic directions given:
File and exchange completed disclosure form (Form E)
A short statement about the financial issues between you
A chronology of important events of the marriage or civil partnership
A questionnaire if you have queries about the other persons financial disclosure and
A form saying whether you will be using the first hearing for directions or you will be able to negotiate to see if you can reach an agreement (so the court can set enough time).
If it is not possible to negotiate, at the first appointment the court will consider whether any more information is necessary to decide what should happen, which may include provision for questionnaires (e.g a request for further information and any documentation missing from the financial disclosure so far)
Whether any expert evidence (for example as to the value of property) should be obtained and by when.
Next court fixed for financial dispute resolution hearing. A financial dispute resolution (FDR) appointment is a without prejudice hearing. The purpose is to facilitate discussion and negotiation between the parties with a view to reaching settlement or making at least progress towards a settlement by narrowing the issues.
Final Hearing – Order made.
Dividing finances can often seem overwhelming but with the right support you could get the outcome you are seeking.