Family Law

Divorce agreements which can go wrong !
19 October, 2017

Many divorcing couples think that once they have obtained their decree absolute of divorce, and divided their assets, then this will bring to an end the legal obligations that they have to each other. Unfortunately, this is not always the case.

There was a high profile case last year, called Briers and Briers (2017 EWCA Civ 15)

Mr and Mrs Briers divorced in 2005 with Mr Briers transferring to his wife the family home, which had an approximate value of £700,000, and providing a lump sum of £150,000 to pay off the mortgage.  In exchange, Mr Briers retained his business which he had started, in the garage of the family home in 1998, with the sum of £81.  Both Mr and Mrs Briers were full time teachers at the time. 

In 2013, eight years after the divorce, Mrs Briers made an application to the court for the financial issues arising out of the earlier divorce to be decided.

The critical factor was that Mr Briers, in the interim period, had managed to transform his fledgling business into a major fashion chain, incorporating well known brands, such as Lambretta and Vision Street Wear, with an annual turnover up to £30 million ! Whilst Mr Briers was building up his fashion empire, Mrs Briers continued to teach and look after the children of the family. 

Mr Briers argued in court that there was a verbal agreement between him and his former wife, which provided for him to transfer the family home to her etc, and that he should not therefore have to pay anything more.

When the case reached the Court of Appeal, the court said that there had been no agreement between the husband and wife in 2005 that would prevent the wife from making a financial claim and that whilst the delay on her part was relevant, this did not knock out her claims.

The court said that the wife had continued to contribute, after the divorce, to the family by looking after the children, and this was a highly relevant factor.  On this basis, the court agreed that Mrs Briers was entitled to approximately one third of Mr Briers’ current assets/wealth.

The crucial step that a divorcing couple should take, once they have agreed how to divide the assets, is to obtain a court order which confirms that the agreement is in full and final satisfaction of the financial claims of the wife and husband. This will prevent either spouse from being able to go back to court many years later to ask for more money.

Such court orders, known as “consent orders”, are relatively easy to obtain and having one brings certainty that the agreement reached can not be undone many years later.

If you would like to discuss any issue arising out of the above, please contact Benjamin Carter by email at benjamin.carter@ cripps.co.uk


What do I do if I think my spouse is hiding assets?
25 September, 2017

During financial remedy proceedings or as part of a voluntary process such as mediation, both parties will have a duty to the court and to one another to give full, frank and clear disclosure of their financial (and other relevant) circumstances. If a court is not provided with all of the information relevant to a certain case, it will not be able to properly exercise its discretion under section 25 of the Matrimonial Causes Act 1973, the relevant legislation, to determine a financial remedy order.

The court is very clear about this obligation from the outset of all proceedings and the Resolution Code of Practice requires all family lawyers to emphasise to clients the importance of being open and honest. Any failure to provide full disclosure could risk a final order being set aside and in extremely severe circumstances, criminal proceedings can be brought against the offending party if they are found to be deliberately untruthful. Unfortunately, these deterrents do not appear to be enough for some parties to stop and take note of their obligations and non-disclosure continues to be a problem for many divorcing couples. There is some light out there for the weaker party with the court offering the following assistance:

  1. During proceedings, you can invite the court to draw adverse inferences from the fact that your spouse has failed to disclose assets. In effect, you would be asking the court for a greater award on the basis that your spouse has sufficient assets and/or income to meet your proposal if a certain order is made. The starting point in all financial remedy proceedings is that each party bears their own costs. It is very rare that the courts depart from this rule, however, non-disclosure is one circumstance which may cause it to make an order that your spouse pay some of your legal costs.

 

  1. If you suspect that your spouse is being assisted by a family member or a business partner, for example, in hiding assets then it is possible to join that party into the proceedings or serve them with a witness summons to provide evidence at court and/or produce relevant documents to the dispute. If, however, a third party is joined to the proceedings and matters do not transpire as you anticipate, then it is important to bear in mind that you are at risk of a Judge making an order that you pay their legal costs.

 

  1. If there is a strong possibility that your spouse is likely to sell their business or a valuable asset and/or remove it from the jurisdiction, the court has the power to freeze its sale. A freezing injunction essentially allows you to preserve an asset so that the proceeds of sale are not dissipated before division of assets has been decided and a financial remedy order is made. This does of course require disclosure of the asset in the first place, however, if you have a strong suspicion of something such as this existing you should discuss whether a freezing injunction is appropriate with your solicitor.

Hand in hand with the question, what do you do if you suspect non-disclosure, is what you shouldn’t do. The Court of Appeal has made it clear; you cannot pry into your spouse’s private affairs and it follows therefore that they are entitled to retain their confidentiality and privacy. Any attempt to remove documents or information without your spouse’s permission is likely to be considered a breach of confidence which risks the imposition of civil or criminal sanctions. There are a number of other matters that must be considered in this regard therefore if you do have any concerns speak to your solicitor immediately.

If you would like help in determining whether any of the above actions are necessary in your case, please call Camilla Hooper on 01892 506 141 for a free telephone call to discuss your circumstances.


Will our assets be divided equally when we divorce?
15 September, 2017

The short answer to this is… it depends.

The aim of the law in this area is to achieve fairness.  Fairness doesn’t necessarily mean dividing assets equally, but it does mean avoiding discrimination between spouses and their respective roles in the marriage.  Whilst the starting point is an equal division of assets, in some circumstances an unequal distribution of assets may be fair.  For example, if one spouse’s mortgage capacity is lower than the other’s, it may be fair for them to receive a greater share of the assets in order that they can both be housed in similar properties. 

The courts are guided by three principles, together with the relevant legislation, when determining a financial settlement:

  • Needs – are there any children of the family?  If so, what do they need, and what do the parties need to ensure they are housed appropriately, and their outgoings met?

 

  • Compensation – should one party be compensated for a loss of income as a result of giving up a well-established and lucrative career to look after children or exercise a domestic role?

 

  • Sharing – have the assets been fairly shared between the spouses on divorce?

 

In most cases there aren’t enough assets to get beyond principle 1.  Once needs are considered and provision made for the family, there aren’t surplus funds to consider whether one party should be compensated for giving up a career, or whether the assets have been shared appropriately.  However, in cases of significant wealth, where there are surplus funds once needs have been met, principles 2 & 3 will be considered.

If you would like help in determining what a fair and reasonable settlement could look like for you, please call Claire Tollefson on 01892 506191 for a free telephone call to discuss your circumstances.


Do we have to go to court to get a financial settlement?
12 September, 2017

In short, no. There are many ways in which you and your spouse can reach a financial settlement on divorce, and going to court is just one of them. However, in order for a financial settlement to be “full and final” and provide the clean break which many couples want, it does need to be approved by the court. But, this won’t require you to go to court yourself and your solicitor can correspond with the court on your behalf.

When a couple divorce (or dissolve their civil partnership), they can ask the court to help them to decide how to divide and arrange their finances. This might involve deciding what to do with the house, or whether one of you should pay some maintenance to the other. For those couples who cannot reach agreement – with or without solicitors assisting them – the court can ultimately make a decision on their behalf which will be binding on them both. The idea that someone would make a binding decision on their behalf can put a lot of divorcing couples off going to court. They want to feel empowered to make their own decision. There is certainly some truth in the idea that you are more likely to stick to and accept a settlement which you have reached yourself.

Some couples will start off having discussions between themselves at home, perhaps with the assistance of a family member (maybe a parent) as an informal mediator. It’s sensible to speak to your solicitor alongside these discussions so that you know what the court may decide for your family, and so that you know that the proposals being made by your spouse are fair. If discussions at home stall, then your solicitor can write to your spouse’s solicitor, or you could try mediation.

When you do reach an agreement, your solicitor can assist with drafting the all-important Consent Order. This is the document which will give you the “full and final” settlement or clean break. Without this document (or a final order of the court following full court proceedings), your spouse could make further claims against you in the future so this document is key. When agreed, it’s sent off to the court, approved by a judge (who will first check that it is fair for your family) and returned with a court stamp. All without you needing to go anywhere near a court.

If you would like further information in relation to the contents of this post, or any aspect of family law, please contact Helen Fisher on 01892 506 258 or helen.fisher@cripps.co.uk.


Is equal always fair?
8 September, 2017

It appears not, according to the Court of Appeal’s recent ruling in Hart v Hart. Despite a long marriage of 23 years, assets created between the couple during this time were not equally shared between them on divorce. The court awarded the wife £3.5m of a total of almost £9.4m.

This ruling appears to put the progress of case law since White v White in 2000 into reverse.  In that case, the Supreme Court had made clear that, in deciding how matrimonial assets should be fairly distributed between a couple on divorce, there should be no discrimination made between the contributions made by the money maker and the home maker. Particularly, that where there are resources available beyond what a couple needs, that the division of the family resources should be checked against ‘a yardstick of equality’.

This has been accepted as an obviously fair principle to be applied, after decades of unfair and discriminatory case law before White. Hart turned on the fact that much of the wealth created by the husband pre-dated the marriage and so should be retained by him.  If Hart is now to lead the way, the question is begged again at how a domestic and family contribution can ever ‘outweigh’ a financial contribution to the marriage. How can that inequality be fair?

If you would like further information in relation to the contents of this post, or any aspect of family law, please contact Sophie Barrett on 01892 506249 or sophie.barrett@cripps.co.uk.


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