Financial Order Procedure
Financial Order Procedure
To obtain a financial order certain information and documentation needs to be made available to the Court and the other party before the court can make a final order.
Mediation
Before an application is issued, the Court must be satisfied that both parties have had the chance to attend mediation. At the very least, the Applicant (party making the application for a financial order) is required to have attended a Mediation Information and Assessment Meeting (known as a “MIAM”), save in certain specific circumstances.
How to Apply
An application for a financial order is made after the commencement of divorce or civil partnership dissolution proceedings.
The petitioner will ordinarily have marked on the petition their intention to apply for a financial order, however either the petitioner or the respondent within the divorce can apply to the court for a financial order.
There is a Court fee payable (£275) and once the application has been made (on a Form A), the Court serves notice of the proceedings on the Respondent.
The court will set a timetable, which both parties are ordered to comply with, to include the date by which Form E financial statements (documents containing financial disclosure) are required to be prepared and setting a date for the first hearing (the First Appointment).
It is common practice to finalise the financial proceedings before applying for final order (previously Decree Absolute).
The Financial Statement
The first step will be to exchange full, frank and clear financial disclosure with your spouse.
This may seem like a huge invasion of privacy, but it is necessary to place “all your cards on the table” before a financial settlement can be negotiated as it is paramount that both parties know what is in the “matrimonial pot”.
If a Form A application has been issued, each party will be required to complete Form E financial statements. It is also open to parties to exchange these documents on a voluntary basis, should proceedings have not been issued, ahead of seeking to conclude a settlement by consent.
Various financial documents are required to be attached to the Form E, such as bank statements, house valuations and pension statements.
Once completed, the Form E can be simultaneously exchanged with the other party and filed at court.
The First Appointment
The first appointment will usually take place in front of a District Judge and both parties to the divorce must be present.
Ahead of the appointment, in addition to filing and serving Forms E, the parties / their legal representatives will have also prepared: a Chronology and Statement of Issues, which they are encouraged to agree as far as possible. If either party seeks to raise any questions in respect of their spouse’s Form E, they may further prepare a Questionnaire. If the parties do not wish to do so and are confident that there has been a comprehensive exchange of financial disclosure, it is open to them to use the First Appointment as an opportunity to negotiate and they must advise the court on a Form G that they wish to do so. If the parties are not ready, the appointment will proceed as a directions appointment only.
Any further evidence, such as valuation evidence, can be considered by the court at this juncture and so the parties are best advised to apply (under Part 25) should they seek to adduce expert evidence ahead of the First Appointment, to enable this to be considered at this juncture.
It essential to the expeditious conclusion of the case that both parties provide up to date and comprehensive disclosure. A party's refusal to co-operate might lead the Court to infer that they have something to hide and might therefore have more assets than they are declaring.
Financial Dispute Resolution Hearing ('FDR')
The FDR hearing is essentially judge-led mediation and is an effort to settle the matter through negotiation and discussion.
The parties / their legal representatives will attend court at least one hour before the hearing is due to start.
The legal representatives will enter into negotiations in an attempt to narrow the issues in the case.
During the hearing itself, the judge, having read the papers filed in the case, will hear submissions from the legal representatives and then give “without prejudice” indications in respect of settlement.
The parties / their legal representatives will usually then leave court and resume their negotiations.
The parties / their legal representatives can return to court as many times as the judge can accommodate for further guidance.
If an agreement is reached at FDR, a consent order will be drafted, setting out the terms of settlement in a prescribed format. The District Judge will be invited to approve the order and conclude the financial proceedings.
If an agreement cannot be reached, the District Judge will list the matter for Final Hearing.
It is important to remember that even if an agreement cannot be reached at FDR, it is still possible for negotiations to continue between the parties / their legal representatives afterwards, with a view to settling matters by way of a Consent Order, which can be sent to the court for approval.
Final Hearing
The final hearing in financial proceedings is not dissimilar to the final hearing in other family matters; the parties are usually directed by the court to file and serve statements in advance, with oral evidence given by the parties and, where relevant, experts and other witnesses at the hearing.
Having heard the evidence, the judge will make a final order.
It is important to note that the judge at the final hearing will never be the same judge who attended the FDR hearing.
Does the Court Always Have to Decide or Can the Parties Agree Between Themselves?
Parties can agree to enter into a voluntary exchange of financial disclosure with a view to reaching an agreement by consent and avoiding issuing a formal application to determine the finances. Some parties choose to jointly engage a mediator to assist with this process and other parties prefer to respectively instruct solicitors to advise them and negotiate on their behalf.
If an agreement is reached, a Consent Order will be drawn up setting out the terms of settlement.
The Consent Order will be filed at Court together with a Form D81 Statement of Information for a Consent Order, which summarises the assets, income and liabilities of each party and a Form A financial application (marked “for dismissal only”).
A court fee of £53 is payable.
If approved the court will seal the Consent Order and return it to the parties.
How Long Will It All Take?
The total time spent will depend on the willingness of both parties to co-operate and negotiate, and the complexities of the financial issues in question.
If formal proceedings are issued, and it is not possible to agree a settlement at any point after issue, the likely timeframe to final hearing is 12 months.
How Can We Help?
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Choosing the right legal team is key to your emotional and financial future. This is why we are offering you a complimentary, no-obligation, initial consultation with one of our experienced legal experts to discuss your situation and provide you with a general overview of what your options are.
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