The term ‘family law’ covers a range of different matters, including divorces, arrangements for children, financial arrangements and separation of cohabiting couples. This is therefore a broad subject matter. This article tries to focus in on some specific examples of best practice in family law to help identify and avoid some of the common pitfalls.
By their nature family cases tend to be an emotional process, which can often magnify the disagreements about matters at hand and make them harder to resolve. This is completely understandable, but parties should always try to remember that the best way to conclude matters both in terms of the financial cost and the emotional cost is to reach an agreement with the other. Reaching agreement is also likely to mean that the process will be faster, allowing all those involved to move towards a more certain position, without as many delays and frustrations, which we as lawyers see happening more and more when the courts are involved.
It is not always possible to reach agreement as there has to be some compromise involved on both sides. It is not advisable to agree to something which is fundamentally unfair and would seriously prejudice you in the long run. However, even if you are having difficulty in reaching a final agreement, there are ways to agree what the next steps should be. If the court do need to be involved they expect parties to cooperate as far as possible with regards to the management of the case. Not only this, but establishing shared premises on which to operate (such as valuations of assets in financial matters or the best interests of the children in Children Act matters) can often be half of the battle and you may find that once these points are agreed, a final agreement follows naturally.
Always keep considerations in relation to any children separate from the financial matters. One way to help do this is to try to agree certain basic points (such as with which parent shall live (or both) before delving in to the details of any financial negotiations. This approach has a number of advantages. First it sets a precedent for prioritising the children. Financial matters can be a fairly involved process and it can help to make decisions regarding the children before the waters become muddied by in-depth financial negotiations. Having an agreement with regards to arrangements for the children can also actually help the financial negotiations as it provides a common understanding of the future landscape (see comments above with regards to establishing shared premises for negotiations).
With regards to financial matters arising from a divorce, there is an ongoing duty for both parties to provide full and frank financial disclosure to the other up until the point of a final agreement to settle each party’s claims. It may be tempting to cut corners on this part of the process or to assume the other party is aware of your financial position. However, once a final agreement is reached or a court order made, one of the most fundamental challenges to this is for a party to allege that there was a significant piece of relevant information that the other party had not disclosed at the time. Where such a challenge is successful it has the potential to re-open the case afresh. Going through a proper process for disclosure is therefore not just as a way of ensuring that you understand the other’s financial position and are able to make informed decisions, but is also a way of protecting yourself from future challenges to a final agreement or court order. If in doubt or if you have concerns regarding a specific piece of information and how it might impact your case, I would suggest speaking to a solicitor or other experienced legal practitioner before you deal with it.
The most common way to ensure that disclosure is comprehensive, is to use the standardised Form E, which has been designed for use in court proceedings to provide a complete picture of the party’s respective finances. The Form E is not a requirement in cases where parties are able to reach an agreement directly. Where a full Form E is not used, the parties should still pay mind the need for full disclosure and should make sure to record whatever disclosure they do provide in writing (preferably in the form of an email or other direct written correspondence). With the above said, even in amicable cases it is still likely to be best practice to complete Forms E as there is no better way of ensuring that full disclosure has been provided both by you and by the other side and it means all the information is in one place.
Do not be too quick to dismiss the value of pension assets in financial cases. There is a tendency in financial cases for one party or both to ignore pension assets, or at least not to give them much thought. This is not so true in those cases where the value of pension assets are a few hundred thousand or where there is a sizeable public sector pension scheme, as it is hard to overlook large numbers even if they do relate to pensions. However, in these cases, people can still be reluctant to instruct a pension expert to provide a report on the pension assets in question unless the total value of the pension assets is exceptional. Pension assets are notoriously complicated and family lawyers are not pension experts. It is important to bear in mind the court endorsed guidance that once pension assets are over the £100,000 mark, parties should start considering instructing an expert. Above this, the higher the figure the more important input from a pension expert becomes. There are other relevant factors that might also point towards the need for a pension expert such as whether there are public sector schemes involved. Parties should remember that a pension asset is still a pot of cash at the end of the day, which can (normally) be accessed at 55 and used as that person sees fit. There may be some tax implications to accessing the pension money, but this is true of other capital assets that are often viewed more favourably such as additional properties, the sale of which after a few years will almost certainly incur a capital gains tax liability. It is widely accepted that the value of pension assets is not the pound for pound equivalent with cash. However, with regards to smaller pension assets (where the advice of a pension expert is rarely sought) deciding exactly what they ae worth to the parties in each case can be a bit more of an art than a science and therefore offers fertile ground for negotiations.
Finally, whatever the case relates to, I would strongly encourage people to take advice early on in the process. I appreciate that I would say that as a family lawyer and where money is tight, people may want to take try to resolve matters themselves as far as possible. However, even from this point of view I would encourage taking pre-emptive advice. As family solicitors, we are often consulted once a case has already gone awry and at that point, it can be more costly to set matters right than it would have been to have taken advice from the start. Taking initial advice does not mean that your solicitor will need to fully represent you throughout the matter, but it can help to set your case off on the right tracks.