As vaccination programs begin to take effect, and restrictions are gradually lifted, many are looking forward to getting back to some form of normality in the coming weeks. However, many others are facing a new challenge, writes Caroline Holley, partner at law firm Farrer & Co.
The difficult circumstances of the past year have put relationships under huge pressure, and for some, that pressure has resulted in the end of their relationship.
If you have clients who are facing separation or divorce, there are a number of factors to consider in guiding them towards a constructive resolution.
Specialist family law advice in relevant jurisdictions
There is no substitute for individual, specialist, legal advice.
Where clients are connected with more than one jurisdiction, it is important to take urgent, early advice in each of those jurisdictions to determine where the proceedings should take place.
Timing can be key, as in many jurisdictions, the proceedings will take place in the country where proceedings are issued first.
Even where a couple has reached an agreement as to how they plan to split their assets, they will need a solicitor to draw up the paperwork and help ensure all the technical aspects are covered.
The importance of privacy
If the couple in question are still living together after they have agreed to separate, it is important that they each have privacy; they should each have their own space in the house and should agree to respect the other’s privacy.
Ground rules regarding the use of communal spaces will help to avoid issues.
Information gathering
A solicitor instructed to resolve financial matters on divorce will need to have a full picture of the family finances.
It is therefore important that both parties have a full understanding of their own financial situation so that they can accurately inform their solicitor at an early stage.
It can be hugely helpful for advisers to help clients gather this information and the accompanying paperwork so that when they seek advice, they have the correct information to hand. It can save on legal costs, and delays moving forward, if this groundwork is done in advance by those with an in-depth knowledge of the party’s finances.
It is also recommended that individuals, and their advisers, read up on the divorce process in advance. This should help them feel more confident when they take legal advice.
Maintain the financial status quo
Clients should be advised against restricting their partner’s access to funds during the divorce process.
Equally, it is usually a bad idea to try and increase spending in a bid to bolster a financial claim.
Neither is likely to be effective, and can result in criticism by the court.
Consider alternative methods of dispute resolution
The court system in England was already over-burdened, and the Covid-19 pandemic has significantly worsened the position. It is clear that there will be delays for a long time to come.
It is therefore advisable to consider other methods of resolving matters wherever possible.
Arbitration is available to resolve financial disputes on divorce. Parties can appoint an arbitrator to determine the issues between them and agree to submit to the arbitrator’s decision. Once the decision has been made, the parties file an agreed order reflecting the outcome of the arbitration with the court, which results in a final and enforceable court order.
Mediation is another method of resolving matters without going to court. Couples meet together with a mediator and discuss the issues between them in an effort to reach an agreement.
There is no guarantee that an overall agreement will be reached, but nevertheless it can be used to resolve immediate issues such as living arrangements, or issues involving children, pending a court appointment.
Help clients to help themselves
Solicitors generally charge on the basis of time spent working on a matter.
Therefore, the more a client does for themselves, the lower their costs will be. Financial advisers can be instrumental in helping clients to prepare an initial summary of their financial position.
This will save time during any meeting itself, which can instead focus on key advice. Further down the line, clients are required to complete a financial disclosure document – known as a Form E.
This document provides the court with a detailed summary of their financial position, both capital and income, and also requires clients to set out their annual expenditure needs.
Again, advisers can be of huge assistance in helping clients to complete this document, which will save their lawyer considerable time, and assisting them with accurately setting out their income needs.
Marital breakdown and the consequent financial arrangements that need to be made can be incredibly stressful for clients.
Financial advisers can be a valuable source of support in relation to financial arrangements. It is hoped that the considerations set out above will help advisers to provide that support, which in turn will help clients to separate with the minimum of stress and cost.
This article was written for International Adviser by Caroline Holley, partner at Farrer & Co.
