In the following article, Rebecca Dixon, a Paralegal in our family team, explains the types of Financial Orders made in the Family Courts and what the Court considers in making those decisions.
Upon the breakdown of a marriage or civil partnership individuals are often faced with the need to deal with financial issues. The law governing financial provision on marriage breakdown enables a range of financial orders to be made, if appropriate and in particular circumstances. For spouses this is found in the Matrimonial Causes Act 1973 and for civil partners, in the Civil Partnership Act 2004.
There are, generally speaking two routes to dealing with finances upon divorce or dissolution This is either by an agreement, formally known as a consent order, or if the parties are unable to agree and are in dispute, an application to the Court to issue proceedings.
Types of Financial Orders
The orders made are case specific and depend on the particular circumstances of the parties and the finances involved .
Income Orders
- Maintenance Pending Suit – this is an order to provide a spouse with regular payments in the short term until the divorce is determined.
- Periodical Payments – this is an order for payments to be made usually in weekly or monthly sums. The court can limit the term of the Periodical Payments Order to years or months, if it considers a party should become independent after a period of adjustment.
- Secured Periodical Payments – this is an order for secured payments to be made to a party or a child of the family. A Secured Periodical Payments Orders places a charge on an asset to ensure the payments are paid out of capital if the regular payments are not made.
Capital Orders
- Lump Sum Orders – this is an order for a party to pay the other or to a child of the family a cash lump sum. In some cases, it may be specified for the lump sum to be paid by instalments. These orders are usually made to adjust the final division of a parties assets and are frequently used in conjunction with an order dealing with the family home.
- Property Adjustment orders – this is an order commonly used in relation to family property. The property may be transferred from one party to another or held on trust. This is often used in relation to the family home.
- Orders for Sale – this is an order for the sale of any property that either party owns. It can be ordered that the sale shall not take place until a specified event takes place for example when the youngest child of the family reaches the age of 18. An order for sale can be a fallback option in situations where an agreement to transfer a property fails to proceed.
- Pension Sharing Orders – this is an order in relation to a pension. The pension of one party may have accrued significantly during the marriage and may have become a valuable asset. This order enables a pension to be divided between the parties at the time of divorce. Dealing with Pensions is extremely complicated, and a lot of factors have to be considered.
Factors considered by the Court
When the Court is dealing with financial provision deriving from a breakdown of marriage or civil partnership they must take into consideration certain factors. Even when an agreement has been reached, the Court is always tasked with weighing the factors set out in the legislation in each individual case.
The factors the court has to consider are:
- The income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the future.
- The financial needs, obligations and responsibilities of each party to the marriage has or is likely to have.
- The standard of living the family enjoyed prior the breakdown of the marriage or civil partnership.
- The age of each party and duration of the marriage
- Any physical or mental disability of either party
- The contributions which each party made or is likely to make in the foreseeable future to the welfare of the family, including the home or caring for the family.
- The conduct of each of the parties.
- In the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.
Routes to obtaining financial remedy
Where the parties are in agreement on how to deal with their matrimonial assets, this can be done via a written agreement, known as a consent order.
The application to court is accompanied by a statement of information, detailing the current financial landscape of both parties and the anticipated financial landscape of both parties once the order comes into effect.
This is then sent to the Court for consideration. Despite the existence of an agreement between the couple, the Court still has discretion to refuse an order if it does not seem objectively fair.
In situations where parties are unable to reach an agreement, it is now expected by the Court, that parties attempt what is called Non-Court Dispute Resolution. This commonly involves attending mediation but there are other forms of NCDR.
If the parties still cannot reach a consensus, an application can be made by either party to the court. The court sets out a timetable and directions both parties must comply with. If agreement is not reached along the way, the Court will make a decision for the parties.
We offer expect advice in relation to financial remedies and can assist when there is an agreement in place, where help is needed in reaching an agreement and in situations which involve court involvement.
Get in touch
Dealing with a marriage or civil partnership breakdown can be extremely challenging in many ways. If you would like to find out more about how we can help you, please contact us via calling 01204 377600 or emailing familysolicitor@afglaw.co.uk and we can arrange a consultation with one of our solicitors.