Divorce and Consent Orders

September 21st, 2010

It is a terrible shame that when a marriage breaks down and divorce proceedings become a reality, the parties attitude toward money and the finances of the divorce also takes on a new appearance and, sadly, can often bring out the very worst in people.

The Financial Aspects of a Divorce is called Ancillary Relief. There are four ways in which couples will usually deal with the financial aspects of the divorce (the ancillary relief), but no matter which route you take, to make it legally binding you must have a Consent Order. You could:

1. agree a financial separation package between them and then encopass this in a legally binding agreement called a Consent Order
2. not agree on the financial aspects of the divorce and proceed down the court route, called Ancillary Relief
3. opt for mediation to help agree on terms and then encompass that agreement in a legally binding agreement called a Consent Order
4. do nothing

We have already dealt with option 4, do nothing, before and for the reasons set out here, it is not a very good idea. Nevertheless it is astonishing how often people opt for this option, only to regret it later.

Option 3, mediation, is excellent if, despite the divorce you both have the ability to sit in a room and discuss the finances of your divorce with an impartial third party in a fair and reasonable manner. Mediation is tough and certainly not ideal for everybody, but when it works, it works quite well. There is no reason why you should not just give mediation a try anyway and, if worst comes worst and you can’t agree, then you still have the option of proceeding down the court route through Ancillary Relief.

Option 2, Ancillary Relief, is a process which is set out in law in some detail. Essentially it involves application being made to the court to assess your financial position and that involves a full and frank disclosure of all your financial details with your former spouse. The procedure for Ancillary Relief is set out here. You can also contact us for a free 30 minute telephone consultation on 020 8401 7352 about the financial aspects of your divorce should you require.

option 1, where you are able to agree the financial aspects of your divorce without recourse to any third party is of course the ideal situation. However; when taking this route, parties should still always ensure that they at least take professional legal advice from an expert family law solicitor. This does not need to be a costly exercise. We often advise people on the pro’s and con’s of the agreement they are reaching with their former spouse and the costs of this advice is often little more than a consultation fee or perhaps a couple of hours of our time. In such a case we would not be ‘representing’ you in your matter, but we would be advising you in the background.

You should bear in mind that a financial settlement needs to take into account many different aspects, including any properties, valuable possessions, business assets or shares, back accounts, savings, investments, and pensions too. This process often involves some form of valuations being carried out. These can be complex valuations involving reports from experts, but in most cases we can value assets for you using relatively cost effective means.

Once an agreement is reached, no matter which route is followed, that agreement must be set out in a legally binding document called a Consent Order. Essentially a Consent Order is a court Order which has been reached by ‘consent’ or by ‘agreement’ between the parties. Therefore the parties will sign the consent order and this will be filed at the court where a Judge will review the agreement and, only once the Judge is satisfied that it is a fair agreement to reach, will the Judge seal the agreement into a legally binding court order, called a Consent Order. The procedure for a Consent Order can still be a relatively straightforward matter, but nevertheless one that still requires expert legal advice before it is filed. Again this does not need to involve endless legal fees and it very often something that we can do on your behalf for a modest fixed fee of a few hundred pounds.

Failing to encompass your agreement in a Consent Order is about as good as not bothering to reach an agreement in the first place. Only Consent Orders are legally binding agreements. Anything written out on the kitchen table, even if witnessed by friends and family is very unlikley to have much legal value if and when it comes to a disagreement. A Consent Order is a final court order and rarely can your ex-spouse question the consent order or try to challenge it through the courts.

Some couples think they don’t need a final Consent Order because they have very little assets, or they agree amicably between themselves who gets what. This approach may be fine for some people but it is a high risk approach. If you do not resolve the finances of your divorce through a Consent Order and say one day you come into money, perhaps an inheritance or you receive a major increase in salary or better still you manage to win a lottery, where there is no Consent Order then there is nothing to say that your ex-spouse cannot bring a financial claim against you, despite the fact that you may have divorced years earlier. When you purchase a brand new camera or camcorder you take out an extra 5 years insurance, ‘just in case’. Well, ensuring that you embody your financial split in a consent order is no less important and may well end up saving you hundreds of thousands of pounds in the long-run. Consider it another insurance policy.

Without a Consent Order, any agreement you reach between yourselves is not legally binding!

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