Financial Dispute Resolution

There are various ways in which a financial dispute during divorce can be negotiated and overcome. Here we explain the primary methods.

Negotiation Between Solicitors

Both parties instruct solicitors who then engage in correspondence. Both parties set out full information as to their capital and income. This can be done by way of basic schedules with some supporting evidence such as bank statements, valuations etc. Alternatively many solicitors require this to be done more formally by using the financial statement that is used by the court, known as Form E. (See our Financial Settlements Page.)

The solicitors enter into negotiations with a view to reaching a financial settlement. At any stage either party can make an application to the court, for example if they do not feel the other party is being frank in their disclosure or is not adopting a reasonable stance in negotiations. If an application is made to the court then the case becomes managed by a court process which ultimately culminates in a final contested hearing. However, a case can settle at any stage and most cases do settle before the final hearing. Clearly a court application increases costs and so it is sensible to consider at the outset if a court application is warranted.

 

Mediation

Both parties are referred to an independent mediator who arranges a series of meetings. Usually it follows after initial meeting with their own lawyers who will agree on the mediator. A mediator is usually a trained lawyer by background. However, their role is to facilitate discussion but not to advise the individual parties in dealing with finances. Both parties would be required to fill out financial statements used by the mediator, which are usually very similar to the court-style Form E. The mediator would facilitate discussion between you with a view to allowing parties to find their own solution.

Parties can mediate on individual issues such as finances or children or indeed on all issues. Mediation can reduce legal costs and help in preserving a good relationship between you and your spouse. However it is not a panacea and often can be drawn out and fruitless. It is not recommended where one party is fearful of the other or susceptible to being bullied or pressured into an agreement. It is of course possible for the parties to consult with their solicitors throughout the mediation process and in any event once agreement is reached in mediation it would have to be referred back to lawyers to formalise into a legally binding order.

 

Collaborative Law

This is a relatively new process initially developed in USA. It is in many ways like negotiation between solicitors. The lawyers arrange a series of 4-way meetings with a view to dealing with all the issues and reaching agreement. All parties have to sign up at the outset to a ‘participation agreement’. This would mean that you would both agree not to go to court unless or until the collaborative process failed. Further if the process failed i.e. did not result in resolution, then neither party is allowed to continue to use the same solicitor for the court process. Reference can be made to the Resolution website for more information.

 

“Collaborative Law-Lite”

This is collaborative law but where the solicitors are not precluded from further acting. It is difficult then to see how it is anything other than a trendy name for negotiation between solicitors.

 

Timing

In the final analysis the courts are here to achieve a just outcome. The court process encourages negotiation in any case, so if your dispute is not getting resolved by another means, you can and should first get on with putting the matter into the court process. Only the court process can impose a conclusion regardless of the other party’s refusal to reach an agreement. Therefore time spent on alternative dispute resolution can delay a conclusion, and you only achieve a reliable timetable if you issue a court application.

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