Scott Halliday, Partner and Head of Family Law at Sintons, considers with Sabrina Jackland, Family Law Solicitor Apprentice, when intervention by way of application to Court might be needed to resolve financial matters.
When a relationship breaks down, many people understandably want to resolve financial matters as quickly and amicably as possible. That is far harder to achieve than many realise, unless or until they are personally grappling with that issue. While negotiation and alternative dispute resolution can often help parties reach an agreement without the need for litigation in Court, there are circumstances where court intervention becomes necessary. The best way, in short, to address these issues is to get early pragmatic advice and seek to stress test the case with an experienced well-regarded Solicitor. Sintons’ is a highly ranked, creative and experienced team in family law matters. In this article, we explain when court proceedings may be required, whether settlements can still be achieved once proceedings have started, and the risks and realities of allowing a financial dispute to progress to a final hearing.
When Is Court Intervention Necessary?
While many cases can be resolved through negotiation, mediation or other forms of non-court dispute resolution, court proceedings may become necessary where disclosure is not forthcoming. Full and frank financial disclosure is the bedrock of proper legal advice. It underlines the ability of a Solicitor to consider fair terms of settlement. It is critical that it is obtained properly and effectively.
If a party fails to provide sufficient financial information, or there are concerns about the quality or accuracy of that information, it becomes extremely difficult to negotiate effectively. A lay client cannot begin to be able to take informed expert advice, if the information critical to that exercise is incomplete or poorly formed. In those circumstances, the court has powers to compel disclosure and ensure that the necessary information is produced. Whilst a last resort, there are cases, where the court has to be engaged to make proper progress. It is important to ‘stress test’ a case, with a client, upon receipt of some voluntary disclosure whether it is practically and financially worth pursuing resolution outside of Court. It is, very often, but there are cases where it is not.
Court proceedings can be stressful and costly, and we take a pragmatic approach when advising clients. We are extremely diligent and keen to ‘stress test’, giving resolution away from Court a real chance, but it is not always viable. Where court action is the most effective route to achieving a fair outcome, we will provide clear advice and support throughout the process. For clients, crucially, they know that all reasonable efforts have been made to mitigate the upset, delay and costs of court, but it is a last resort with formal teeth. A court order is to be complied with. It is not voluntary; it is court mandated.
One practical advantage of court proceedings is that, once a case is issued, there is a structured timetable and an eventual conclusion. By contrast, voluntary negotiations can sometimes drift without firm deadlines, particularly where one party is reluctant to engage. The commitment of each party to resolution away from court is underlined and informed by how they engage in a voluntary process. If a spouse is not responsive, rude, brash or frankly upon exchange of voluntary disclosure failing to be reasonable and proper, it might be that court is then needed.
The ‘stress test’ is to understand the personalities and the drivers for a certain course of action by a party. We are clear proponents of resolution away from court, if it is workable and proper to do so for clients. It is very often, but not always.
Can Matters Be Settled During Court Proceedings?
Absolutely.
A common misconception is that once court proceedings have started, the matter must proceed all the way to a final hearing. In reality, parties can reach an agreement at any stage of the process. They are also, very often, supported and advised to renew efforts to mediate and/or negotiate via Solicitors, away from the court between court hearings to conclude matters.
If an opportunity to settle arises and a fair and reasonable agreement can be achieved, there is every reason to resolve matters without continuing through the remainder of the court timetable. But, critically, the timetable of the court sits behind it so failing agreement there is still progress.
Whilst progress is always ongoing, the process is sometimes quite slow, so it is right to remain clear that resolution away from the court with quality advice, proper disclosure and good lawyering to bring parties together into the realms of proper fair resolution is best.
In financial remedy proceedings there are typically three key hearings:
First Directions Appointment (FDA)
The FDA is primarily an administrative hearing. The court reviews what disclosure has been provided and determines what further information, valuations or expert evidence may be required. This could include valuations of properties, business assets, stocks and shares, or pension assets. Each case is different. But, critically a Judge is asked to consider the disclosure and comment upon questions raised of it, i.e. a Judge ought to consider if questions asked, say regarding missing information, ought to be answered, which is clearly very relevant in cases of unnecessary hostility and or material non-disclosure.
Financial Dispute Resolution Hearing (FDR)
The FDR is the negotiation hearing and is often viewed as the most important stage in the process. It is the best opportunity to resolve a case, as everyone is present at court or in our offices (a Private FDR) with the aim of resolution.
A Private FDR is something we advocate for regularly, as it affords parties 1 full day in our offices with Solicitors and Barristers present, with all attention and effort on proper negotiations and resolution. A private FDR Judge is appointed in advance. They read all the relevant paperwork. They are often a senior Barrister in family law, with huge experience. They outright indicate and tell parties what they feel is a proper outcome. The private FDR is there is support firmly and fairly a resolution.
Many cases settle at or shortly after the FDR.
Final Hearing
If an agreement cannot be reached, the matter proceeds to a final hearing where a judge will hear evidence and impose a binding decision. This can be 2 days at Court.
The Court does not ordinarily hear evidence before a Final Hearing. It is rare, but it does and can occur, in some cases.
Understanding the Risks of a Final Hearing
Proceeding to a final hearing is not without risk.
Where a judge at an FDR has already provided a strong indication as to the likely outcome, parties should carefully consider the financial and emotional cost of continuing litigation. It is not uncommon for parties to spend significant sums arguing over a relatively small difference in settlement outcomes. The larger the ‘gap’ the harder it is to settle at FDR.
All parties come to an FDR with an open mind, it is hoped, to resolve matters. It is harder to say the same at the time of a Final Hearing, this is where the Court will determine the outcome and it is final.
Seeking the Right Resolution
Every family law case is different. While some matters require the powers of the court to ensure proper disclosure and progress, many can be successfully resolved through negotiation and alternative dispute resolution methods. One critical aspect of all of the above is having quality advice and support to chart the right and best next steps as you proceed. Sintons has extensive experience in how best to advise and navigate complex cases.
The key is ensuring that both parties have access to accurate financial information and expert legal advice so that informed decisions can be made at every stage of the process.
For advice on divorce, financial settlements or wider alternative dispute resolution related to finances, please contact Sintons’ Family Team.
