The financial element is often the most complex and contested aspect of your divorce. In our experience the time it takes to reach an agreement or get a court decision will depend on:
- The amount of assets, and the complexity and resources required to deal with them
- The willingness of the parties to negotiate a realistic settlement
Here we look at how family judges deal with spouses who unreasonably refuse to enter negotiations to reach a financial settlement and how this affects the length of time it takes to finds a financial settlement.
Do I Have To Negotiate My Financial Settlement?
The practice directions – the rules of the court, updated in 2019, state that:
- The court will generally conclude that to refuse openly to negotiate reasonably and responsibly will amount to conduct in respect of which the court will consider making an order for costs against the party that refuses to constructively negotiate.
- This obligation applies in ‘needs’ cases (that is, cases where the available assets don’t exceed the financial needs of the parties) where the applicant litigates unreasonably resulting in the costs incurred by each party becoming disproportionate to the award made by the court.
- Where an order for costs is made at an interim stage against one party, the court will not usually allow that liability to be counted as a debt to be offset against that party’s total assets
So there is a definite incentive for parties to negotiate reasonably. Take the example of MB v EB a 2019 case where proceedings lasted for more than two years and legal costs of more than £1million were run up. This figure was, in the judge’s view ‘grossly disproportionate’ to the issues that were in dispute. He pointed out that the husband had not constructively engaged in negotiations and had not responded to the wife’s offer. If he had done so it was, in the judge’s view, likely that the case would have been quickly resolved. Despite this being a needs-based case the judge reduced the amount the wife had to pay in costs meaning the husband’s needs-based award was reduced considerably.
When deciding whether you are acting reasonably or not in negotiations it’s useful to consider the comment of Mostyn J in another case from 2021. He said that parties:
…must pitch their claims in the area the court might award, and they must engage with bona fide open attempts to settle – especially in the run up to trial. If they do not, then they will suffer a penalty in costs.
Proposals To Speed Up Financial Claims
According to the 2021 Farquar Committee the Financial Remedies Court (FRC) that deals with financial claims in divorce is under extreme pressure. It’s unsurprising then that out of court negotiation of financial settlements that reduce the time it takes to conclude contentious cases and the involvement of the court is encouraged.
The Farquar Committee found that the average time it takes from issuing proceedings to a final FRC hearing is 84 weeks. In its view this is ‘far too long’ and has a huge impact upon separating parties. It also causes substantial emotional distress to the parties and any children of the family. The Committee announced a wide range of proposals aimed at making the FRC more efficient, including:
- A new fast-track procedure for cases where assets are less than £250,00. (The thinking is that if these cases are quickly disposed of the court is freed up to deal with more high value and complex cases).
- The parties should be provided with a simple, neutrally phrased set of guidelines and principles at the beginning of the process
- There should be amendments to Form E to make it more user friendly
At Brookman, we use negotiation and other alternative dispute resolution (ADR) methods to try and reach an out of court agreement on finances and child arrangements. Of course the job of successfully negotiating an acceptable agreement is made easier when the parties themselves engage meaningfully with the process. But as we’ve seen even where parties are diametrically at odds with what is fair in terms of a settlement there is a requirement on both sides to negotiate responsibly.