Jan 17

Divorce and Financial Resolutions – Working Together

The holy grail of divorce proceedings, for all those involved, is to reach an amicable agreement between the divorcing parties on all issues regarding finances (and custody) as swiftly as possible, instead of relying on a judge to make a court ruling which may not best suit one or both of the parties. The more conflict there is, the more expensive the process is, the more damage is done to the relationship and, most importantly, the more damage is done to the children involved and their own relationships.

Mediation

One process which can minimise conflict and cost is mediation. At the heart of this process is the idea that both sides will meet face to face with a neutral mediator (who may or may not be a trained lawyer) to discuss and resolve particular sticking points. The mediator cannot advise the divorcing couple, only facilitate their discussions. This may involve suggesting that parties should seek further advice in financial or legal matters if they deem it necessary however. Both parties can still consult individual lawyers outside of the process but their lawyers are not allowed to take part in the meetings themselves. At the end of discussions, the mediator will write up and prepare the agreed terms so that each legal team can sign them off – entering into a legally binding agreement in doing so.
Mediation can prove significantly cheaper than following the court route with costs estimated at £500 per person compared to costs in the region of £5k to £20k for court hearings. Furthermore, the wider good that face to face discussions do to the relationship between the parties and therefore the handling of their children can be immeasurable.

Collaboration

A relatively new technique which is gaining in popularity is that of collaboration. In a collaborative divorce procedure, each party appoints a specialist collaboration lawyer and the individuals and their lawyers all meet face to face (as opposed to traditional correspondence between lawyers) to discuss and hopefully resolve disputes without the need to go to court. Collaborative lawyers are trained to work together towards a solution rather than solely representing their own clients and again the process can bring in other professional advisors to facilitate the meetings in relation to financial matters or child welfare.

If the collaboration process does not yield a resolution, the case will still then need to be heard in court, however, each party must enlist new legal representation and the discussions held in the collaborative process cannot be referred to in the court hearing without the consent of both sides. This exercise in drawing a line and making a clear distinction between the collaboration process and the courts ensures that the discussions in the former can be as open as possible.

Again collaboration should prove cheaper than the court route as it is often limited to around 3 to 6 meetings with court hearings only occurring if the process fails. Successful collaboration can therefore negate the expense of extended litigation and correspondence by post etc.

Funding Issues

As mentioned above, following a collaboration or mediation route can prove significantly cheaper than taking financial disputes to the courts. This is becoming particularly salient as the government looks to reducing the funds available to prospective divorcees through legal aid and because of the fact that fewer law firms are now prepared to take on legal aid cases due to their added bureaucracy (legal aid applications etc). The rationale behind government cuts to legal aid are that more couples should be encouraged to pursue mediation and this is being backed by a significant increase in mediation funding.

For those who do find themselves in court and can’t access legal aid there are ways of accessing funds which involve the the lending of money, via a solicitor, from a bank or a litigation investor. In addition, employing a solicitor on a fixed fee rather than an hourly rate can not only control but significantly reduce costs. However, the most effective way of ensuring that the funds needed for the future of the individual and their children are left intact is to make use of either mediation or collaboration.