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A long-awaited change to financial remedies on divorce?

Divorce

It’s now been over a year since the No-fault divorce bill came into force In England and Wales on 6 April 2022, reforming the divorce process significantly by removing the need to place blame to end a marriage and making the process simpler for those without legal representation such as moving to an online platform and simplifying the terminology used within the process. 

The government has now asked the Law Commission to review the current laws which govern the use of financial remedy orders in England and Wales to include review into whether the current law is working effectively and promoting fairness in the outcomes achieved for separating couples. 

 

How can matrimonial finances be agreed? 

There are many ways in which financial settlements can be agreed, this can be through negotiations between the separating parties directly or through their instructed representatives. Some parties may wish to participate in the process of mediation to help them achieve an amicable agreement. There are also collaborative processes and family arbitration which can all assist in reaching an agreement. If an agreement is reached, this is reflected in a Deed of Separation, if parties do not wish to commence divorce proceedings, although such agreements are not legally binding or within a consent order, which is then filed with the court for approval and commonly includes the ‘clean break’ provision ensuring no further claims are made in life and death. Once approved by the court this becomes a legally binding order. 

However, in some cases where agreement cannot be achieved, the matter will be referred to court through an application for financial remedy. The parties will still be given the opportunity to negotiate a settlement, however if this is not possible the court will consider each parties position with reference to Section 25 Matrimonial Causes Act 1973 (Matrimonial Causes Act 1973 (legislation.gov.uk) which will include (but are not limited to) the parties income and future earning potential, the duration of the marriage, any minor children of the family and the matrimonial assets to include (but are not limited to) property, land, pensions and any savings and investments. 

 

What is a financial remedy order? 

A financial remedy order is a legally binding court order which determines how a couple’s finances are divided once they divorce. 

 

What can the order include? 

The order can include the sale or transfer of any property/land, how pensions should be shared, any lump sum or periodical payments to be made to a party, maintenance for the benefit of the children or a spouse, and other issues such as the payment of school fees. 

 

Is a change needed? 

A change is prompted due to the somewhat outdated laws governing financial remedy orders dating back to the Matrimonial Causes Act 1973. The government has therefore launched a consultation into whether the laws still promote a fair outcome for parties or whether change is needed. 

 

The project 

The project hopes to determine if there are current problems in the framework which require reform and if so, the possible options for reform. 

The Law Commission is to publish the report in September 2024 which may include the basis for a full review and future reform. Areas covered in the Law Commission review include; whether there should be wider powers given to the courts to make orders for children over the age 18 and the factors judges must consider when deciding which financial remedy orders to make. 

Our team of family law experts understand the importance of maintaining a collaborative approach during relationship breakdowns. 

For more advice, information or to make an appointment, please contact Jordans Solicitors on 0330 300 1103.

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