And why is it so important in a divorce?
It should not be underplayed how crucial it is to properly enter in to an ‘official agreement’ (Consent Order) as it closes off all potential future financial claims against you as far as possible. If not done properly or at all, an ex-spouse could make a claim against your assets, property or income in 5, 10 , 20 or 30 years’ time.
Surely a verbal agreement between us to resolve our finances is enough, and once I receive the Decree Absolute and I am officially divorced, it will automatically mean that the finances are resolved?
Unfortunately not, I am afraid.
You need to both enter in to a Consent Order (if matters are amicable and you do not require the matter to enter the Court arena and can agree a settlement). If you are both not ready to divorce and would like a ‘holding position’ which prescribes your financial agreement more ‘officially’. This can be done by entering in to either a Deed of Separation or a Heads of Agreement. They are both legally binding documents but you will also both need to undertake the process of full and frank disclosure and instruct your own independent legal advisors. It is also good practice to draw up a Consent Order to accompany the Deed of Separation / Heads of Agreement in order for that Consent Order to be used in future and lodged with the Court.
Ok, can we just sit down and draft an agreement on a piece of paper. Will that be legally binding and enough?
I undertake some pro-bono work for the Cambridgeshire Law Clinic and spoke to a wife some weeks ago who stated that she had an agreement in writing with her estranged husband, which was independently witnessed. This document encompassed their financial settlement, and she therefore hoped that this would suffice. I had to be very clear with my advice that whilst it was prudent it did not quite cut it and that in order to resolve the financial element of her divorce she had to enter in to a properly drafted consent order.
So what is a Consent Order?
A Consent Order (also known as a financial remedy order) is a legally binding document that records (with the Court) the agreement reached between divorcing couples in relation to the resolution of financial matters following their separation. The Consent Order sets out the arrangements for the division of capital assets, liabilities, pensions and income.
At what stage is my Consent Order seen by a judge?
Once you are at Decree Nisi stage (of the divorce) the Consent Order can be lodged with the Court for a fee of £50 provided that you have both willingly entered in to the agreement, and signed it accordingly, and ideally both received independent legal advice. You may have both undertaken the process of full and frank disclosure at this stage and this is known as voluntary disclosure. You will both need to complete a D81 -Statement of Information Form which will accompany your Consent Order when it is lodged with the Court.
What is a D81/ Statement of Information Form?
Your solicitor and the Judge that reviews your Consent Order will require some basic information about your finances including: your capital assets; your liabilities; your pension provision; and your income.
The D81 Form/ Statement of Information provides a snapshot of your current financial position and, as stated above, accompanies your consent order to provide the court with background information to your financial situation. This information enables the court to assess the fairness of the agreement you have reached. The D81 Form/ Statement of Information sets out your financial position. The Consent Order sets out how the finances are to be divided between you and estranged spouse.
What happens when all those documents have been drafted?
A family solicitor will then draft an application form to submit your Consent Order and D81/Statement of Information to the Court for consideration of the judge. The Judge will assess the fairness of the agreement reached. There is usually no requirement for the parties to attend Court. The Judge will consider the case based on the paperwork submitted by the solicitor.
Has an agreed Consent Order got a good chance of ‘passing’ with the Judge especially if both parties have agreed and entered in to the agreement willingly?
This is not always the case.
With this information the Court should usually be able to determine whether the terms of the Consent Order are reasonable. However, there will be instances where the judge is not satisfied, in which case they may require the parties to attend court to explain why the order should be made. If the Judge is still not satisfied that the order is reasonable, then they may simply refuse to make the order. This will mean that the financial/property settlement is not final, so that either party could still make a (further) claim against the other.
If the court approves the order, it will seal it and send copies to both parties or their solicitors.
Finally, an important point to note is the timing of the order. Normally, it will be obtained before the divorce is finalised by the decree absolute (it can’t be made before the pronouncement of the Decree Nisi as mentioned above), or simultaneously with the decree absolute, as it is usually best not to finalise the divorce first. Nonetheless, please note that the order will not take effect until the Decree Absolute.
If you require help and advice concerning divorce and financial settlements and would like to discuss how we can help you please contact our Family Team on 01733 882800 or email info@hcsolicitors .co.uk.
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