Consent Orders in Divorce Proceedings19th October 2020 1:34 pm Comments Off on Consent Orders in Divorce Proceedings
What is a consent order, and what purpose does it serve?
A consent order is the legal document that sets out the terms of the agreed settlement reached between the parties in divorce proceedings. This could include your home, bank accounts (whether in joint or individual names), shares, other investments and pensions. It can also deal with the financial aspect of children matters such as the payment of child maintenance, but only for a limited period of 12 months. A draft consent order must be reviewed and approved by a Judge, then sealed by the Court before it becomes a legally binding court order.
We don’t have any financial assets – do we still need a consent order?
Yes! Entering into a consent order – provided it is properly drafted of course! – doesn’t just record the terms of any split of assets you have agreed, it also contains wording that means that you both agree to dismiss any future claims against the other. For example, if one person was to inherit money years down the line and no consent order had been entered into at the time of the divorce, then the other person could still be entitled to claim a share of that inheritance.
What happens if we don’t have a Consent order?
Couples who agree as to how they will split their financial assets at the time of the divorce could feel that it’s an unnecessary expense to obtain a consent order. But it’s important to bear in mind that the divorce settlement they have agreed would not be legally binding without one. The real price of a consent order, therefore, is peace of mind that this particular chapter is over and cannot be revisited again in the future, unless you have to enforce the terms of a consent order.
What is a “clean break”?
The Courts will try where possible to achieve a clean break between the parties. This means that you will no longer be tied to each other financially. There may be some instances where a clean break is inappropriate or cannot be achieved, for example where one party seeks periodical payments such as spousal maintenance. You should always seek legal advice about what is the best solution to suit your own individual needs, as this will vary greatly from case to case.
We have Decree Absolute, we are divorced aren’t we?
There are a lot of misconceptions about this. Whilst you may be divorced on paper, you will not be divorced financially, and will remain financially tied to each other in the future. This means that in the future one party could make a claim in respect of finances against the other party, even decades after the divorce was otherwise “completed”. This becomes particularly problematic if either party chooses to remarry in the future and is a common issue, known as the “remarriage trap”. If you are the one who has remarried, this means that your new spouse’s finances are likely to be intermingled with yours and leaves your ex-spouse open to making future claims against yours and your new spouse’s finances or property. Likewise, if your ex-spouse remarries, you could have a claim against both his or her assets and finances and those of his or her new spouse!
If you are divorced already you should always ensure that a consent order was approved and sealed by the Court at the time, and you should ensure that you keep a copy of this document safe and for future reference. If you do not have a consent order it is not too late to resolve this as a consent order can be entered into even after Decree Absolute has been granted, and even if this was some years ago.
We have reached a financial agreement between us, that’s it isn’t it?
There are three ways in which an agreement can be reached between the parties. Firstly “over the kitchen table discussions”, between the parties, secondly via mediation and thirdly, between solicitors in without prejudice communications.
If you have reached an agreement with your spouse in relation to finances / children matters, you may believe that this concludes matters, but it does not. This is particularly important if the agreement was reached in mediation as you will only be provided with a document called a Memorandum of Understanding which in itself is not a legally binding or enforceable document.
The terms of the agreement must be drafted into a consent order and the consent order must then be filed at the Court, approved by a Judge and sealed with a court stamp. In family matters the Court will not simply “rubber stamp” the consent order; it will be scrutinised by a Judge who will need to satisfy him or herself that the terms of the draft consent order record what they consider to be a fair and reasonable “split” in the circumstances and that one party is not unduly prejudiced by the proposed division of assets. The Judge will make this decision by reviewing the financial disclosure information provided alongside a draft consent order in Form D81- statement of information.
There are some instances where a Judge may reject a draft consent order even though it has been agreed between the parties. This is most commonly where the Court considers the division of assets to be unfair particularly if one party to the consent order is not legally represented. This is why both parties are encouraged to seek legal advice on the terms of any consent order prior to filing it at the Court.
What is a “good” settlement, should it be 50/50?
Legal advisers and the Court determine, what is a fair and reasonable, division of assets, by looking at the individual circumstances of the parties in the case and by taking into account a number of factors based on the Matrimonial Causes Act 1975 in addition to case law where applicable.
The starting point for division of family assets is in most circumstances a 50/50 split. There are many factors that may justify a departure from this starting point, however. The length of the marriage and any period of co-habitation prior to marriage are taken into consideration, as are the needs of any children of the family to whom the Court will give paramount consideration, when determining whether a 50/50 split is appropriate or not.
Both you and your spouse will be required to fully disclose their financial circumstances in a 35 page document known as a “Form E”. This is known as full and frank financial disclosure and this is the only way that your legal adviser will be able to properly advise you as to whether the terms of any agreement you enter into with the other party are fair and reasonable based on your individual financial circumstances.
If you choose to waive your right to full and frank disclosure, you are still able to proceed with any agreement that you have reached with the other party, but your legal adviser may not be in a position to properly advise you as to whether the terms of the agreement reached are fair or not, and the risk will be borne by you in that respect. We are able to advise further in respect of this should you wish to proceed in this way.
What if we cannot agree a settlement between us?
If the parties are unable to agree the terms of any settlement in relation to the finances the matter can be referred to the Court for the Judge to make a decision at a final hearing on what is a fair and reasonable settlement. The terms of the order made by the Judge will then be reflected in a final financial Order being made.
How can we help?
At Colemans Solicitors LLP we do things a little differently. We believe that it is our job to mould the services that we offer to suit our clients’ needs. We respect the fact that our clients are, above all else, people and all are different so we cannot provide a “one size fits all” service successfully. We have observed that recently prospective family clients are coming to us having already reached an agreement in principle with their spouse about finance matters. All they need us to do is to turn their agreement into a consent order that will offer protection and certainty. We can offer even more certainty in terms of fees. If you contact Denise Bullock in our Family Team, she will walk you through the process by telephone and then, with some information and input from you, will provide you with a bespoke fixed fee for the work required to turn your agreement into a draft consent order ready for submission to the Court. If this sounds like what you are looking for, please either telephone Denise on 01628 631051 or email her at email@example.com. We look forward to hearing from you.
This post was written by Colemans Solicitors LLP