'Ancillary relief' is the term given to any financial agreement or settlement between parties to a divorce.
Under Section 23 of the Matrimonial Causes Act 1973, the Court has wide powers to redistribute property between spouses and rule on the provision of ongoing financial support.
Notably, the Court can impose the following:
It is important to note that a Pension Attachment Order will end if the pension holder dies. Furthermore, the income payment will end if the recipient remarries.
In deciding the best approach, the Court will take into account many factors, including;
The above points are known as the 'Section 25 Considerations'.
As a result of the House of Lord's decision in the case of White v White [2001] 1 AC 596, the starting position for the division of assets is an equal division in cases of a long marriage. The House of Lords highlighted that the Courts should consider the division of assets against a 'yardstick of equality'.
In the recent case of Charman v Charman [2007] EWCA Civ 503, the Court confirmed that the starting point in calculating the division of assets in long marriage cases is equality between the parties. The Section 25 factors (see above) are then considered, which may alter the final calculation.
In practice, this has resulted in an equal division being used as a starting point, before the Section 25 considerations are subsequently applied.
If there has been a short marriage (usually less than 5 years) and no children are involved, it is unlikely that an equal division of assets will be ordered by the Court, especially if one spouse brought substantially more assets to the marriage. In this instance, normally assets acquired prior to the marriage will be retained, or returned to the spouse who originally had them, and assets accumulated during the marriage will be divided on an equal basis when the parties divorce.
The Court can take into account any physical or mental disability of either party of the marriage. If you do consider your health to be a significant issue, it may be necessary to obtain a medical report or other suitable evidence, confirming the nature and extent of your condition and setting out a diagnosis and prognosis.
In his final Access to Justice Report of July 1996, Lord Woolf recommended the development of pre-action protocols:
"to build on and increase the benefits of early but well informed settlement which genuinely satisfy both parties to dispute"
Following from this, in April 2000, the Lord Chancellor's Ancillary Relief Advisory Group agreed a 'Pre Action Protocol' in relation to Ancillary Relief.
The aim of this Protocol is to ensure that parties resolve their differences quickly and fairly, and should this not be possible by negotiation, to assist the Court to do so.
The Protocol recommends the following key points:
Solicitors are asked to consider whether mediation would be appropriate and are required to keep under review whether it would be suitable to suggest this route to clients as an alternative to solicitor negotiation/court proceedings.
Parties must seek to identify the issues between them as soon as possible. In order to establish want the relevant issues are, full and frank disclosure is required.
The Protocol highlights the obligation for parties to make full and frank disclosure of all material facts, documents and other information relevant to the issues.
If parties carry out voluntary disclosure before issuing court proceedings, they should exchange schedules of assets, income, liabilities and other material facts, using what is known as a 'Form E'.
As the duty of disclosure is an ongoing obligation, it includes the duty to disclose any material changes (for example, inheritance) after initial disclosure has been given.
Correspondence should be relevant and should focus on the identification of issues.
Expert valuation evidence is only necessary if the parties cannot agree or do not know the value of a significant asset.
In the majority of cases, the parties will reach a mutual agreement between themselves without having to take the matter to Court for a contested hearing. Their solicitors can record such an agreement in the vast majority of cases by way of a Consent Order. The Court must approve this agreement, however, it does not have to involve itself in the actual settlement decision making process.
It must be noted that even if an application has been made to the court, the parties are able to settle at any point during the court process.
If full and frank disclosure is not provided from the outset, either party is free to make an application to the Court to seek further directions for disclosure (by way of a Form A). If necessary, the Court can make a judgement as to the division of assets by holding a 'final hearing'. It is advisable to avoid Court involvement where possible, as significant legal costs can be incurred.
If a party fails to comply with Protocol disclosure and the matter subsequently goes to Court, the Court are able to impose adverse cost penalties as a result of a party's failure to act reasonably.
It is advisable to seek legal advice in relation to Divorce and Ancillary Relief so that:
a) you are fully aware of and compliant with Protocol disclosure
b) you can obtain guidance as to the reasonableness or otherwise of any proposed settlement.
c) Any written settlement can be recorded in the correct manner (namely by Consent Order), using the correct phraseology, preventing possible ambiguity (and any possible future claim).
The Protocol Form E does require you to indicate whether you are co-habiting, or intend to do so within the next six months. It is likely that the other party's solicitors will ask for further information in this respect. In any event, the Court will require some further details at a later stage, as it is a requirement to submit a Form D81 'Statement of Information for a Consent Order' to the Court before a Consent Order can be approved.
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Contact Kevin Smyth or Marie Stock at Burt Brill and Cardens for caring and robust advice in relation to all aspects of your divorce.
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