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Financial remedies until relatively recently came under the term ancillary relief. A financial remedy is a financial order which can come under the following; the Matrimonial Causes Act 1973, Civil Partnership Act 2004, Domestic Proceedings and Magistrates Courts Act 1978 and Schedule 1 to the Children Act 1989.
A financial order within financial remedies can deal with; an avoidance of disposition order, an order for maintenance pending suit, an order for maintenance pending the outcome of proceedings, an order for periodical payments or lump sum provision, a property adjustment order, a variation order, a pension sharing order or a pension compensation sharing order.
When parties separate the financial matters will generally need to be looked at to consider matters such as the family home, if maintenance is to be paid by one party to another and what should happen to the assets of the family plus whether child maintenance is required.
A full and frank disclosure is expected by the courts between the parties regarding their financial circumstances. A negotiated settlement is usually preferable but at times that is not possible and the court will have to be involved if final decisions are to be reached on the finances.
The court will expect each party to seek and provide information from and to each other prior to any commencement of court proceedings, this is called the pre-application protocol.
Estimates of costs incurred by each party are required at every hearing or appointment. The general rule in financial remedy proceedings is that the court will not make an order requiring one party to pay the costs of another party. However the court may make an order for costs at any stage of proceedings where the conduct of a party is considered to make it appropriate to order such.
Parties are expected if possible to identify and narrow issues before the first appointment at court. They are expected to provide a summary of the case agreed between the parties, a schedule of assets agreed between the parties and details of any directions they seek. Questionnaire’s for the other party may be produced if there are queries regarding a disclosure.
The financial dispute resolution (FDR) is to be used for discussion and negotiation. Anything said or any admission made in the course of an FDR appointment is not generally admissible in evidence. Parties are expected to make offers and proposals and for these to be given proper consideration. The court will give an indication as to how matters are likely to be settled to encourage realistic negotiations.
A final hearing is generally to be avoided if possible as costs particularly if lawyers are representing parties can escalate considerably. Each party will be cross-examined under oath and a decision will be made by the court which is imposed on the parties.
Every case falls to be decided on its own individual facts and so it can be difficult to identify general guiding principles which will assist parties in accurately predicting how a court will deal with a particular case.
For those parties who were married then in many straightforward cases generally a starting point of 50:50 has evolved, there being no distinction between the roles of homemaker and breadwinner. However, there are still plenty of reasons why this may be departed from including having assets (e.g. inheritance or property) prior to the marriage and that asset not having been mingled with the family finances. As long as the needs of the parties have been met then it is probable that the division of assets would be unequally divided.
Avoidance of disposition order – An order setting aside a transaction that has already been made.
Maintenance pending suit – The court may order one spouse to pay maintenance to the other until the decree absolute, in such sum as the court thinks reasonable and it may be backdated to the date that a petition for divorce, nullity or judicial separation was presented to the court.
Periodical payments – Maintenance from one party to the other.
Lump sum provision – Payment of monies, could be in installments.
Property adjustment order – Could be a transfer of the property, a settlement of the property, a variation of any pre-nuptial or post-nuptial settlements or an order extinguishing or reducing the interest of a party under any nuptial settlement.
Variation order – To change an existing settlement/order.
Pension sharing order – Transfer of a percentage of a pension-holder’s pension fund into a pension fund of the other party.
Pension compensation sharing order – A parties pension compensation is shared by reducing compensation of one party in a pension protection fund (PPF) and entitling the other to a share of this compensation. It must be paid as PPF compensation and not transferred into another pension arrangement choice of the other former spouse/former civil partner.