Divorce financial settlements

While a divorce itself is usually straightforward, sorting out a financial settlement on divorce is often more difficult.

A financial settlement will determine how assets such as property, pensions, income and savings are divided. Getting this right is essential to ensure your future financial security and to prevent further claims arising later.

If an agreement cannot be reached, an application can be made to the court. At this stage, the team at Napthens will provide clear, practical support tailored to your individual situation.

Negotiating a financial settlement

It may be possible to reach agreement regarding your finances without the need for court proceedings. This can be achieved through direct discussion, solicitor negotiation or mediation.

Even where an agreement is reached, it is essential that it is formalised into a legally binding court order. A court order is final and enforceable, and protects both parties against future claims.

Before approving any agreement, the court will require a summary of each party’s financial circumstances to ensure the proposed settlement is fair. Where both parties have taken legal advice and the agreement is reasonable, the court will rarely refuse to make an order.

To reach an informed agreement, it is important that both parties have full knowledge of each other’s financial position. Where negotiations take place through solicitors, full financial disclosure will be requested before any settlement is approved.

If agreement cannot be reached, it may be necessary to issue court proceedings. Before taking this step, your solicitor will advise you on the likely range of outcomes based on the information available.

Court proceedings for financial settlements

Starting court proceedings does not necessarily mean your case will be decided at a final hearing. In many cases, agreement is reached during the process and approved by the court without the need for a full trial.

Before issuing an application, most cases must be referred to mediation unless an exemption applies. If mediation is unsuccessful or not appropriate, an application can then be made to the court.

The court application process

Step 1 – Issuing an application

Either party can start proceedings by issuing an application to the court, which requires payment of a court fee.

The court will then set a timetable for both parties to provide detailed financial disclosure. This is done using a standard document known as Form E, which includes information about income, assets and liabilities, supported by documentation such as bank statements, P60s, business accounts and pension valuations.

A schedule of assets is prepared and each party has the opportunity to raise questions about the other’s financial position. A date is then set for the first hearing, usually around three months after the application is issued.

Step 2 – First hearing (FDA)

The first directions appointment (FDA) is a short hearing where the judge reviews the financial information provided and determines whether any further evidence is needed.

The court will then set deadlines for any additional information and list the case for a further hearing.

Step 3 – Financial Dispute Resolution hearing (FDR)

The second hearing is the financial dispute resolution hearing (FDR), typically held 12–15 weeks after the FDA.

At this stage, each party’s legal representatives will outline their client’s position. The judge will usually give an indication of the outcome they consider appropriate, with the aim of encouraging settlement.

Many cases are resolved at this stage, once both parties consider the judge’s indication. If agreement is reached, it can be incorporated into a court order and approved without the need for a final hearing.

Step 4 – Final hearing

If agreement cannot be reached, the case will proceed to a final hearing.

Both parties will give evidence and may be cross-examined. The judge will then make a final decision as to how assets should be divided. The court has wide discretion and will make the order it considers fair based on all the circumstances of the case.

Given the uncertainty of the outcome and the costs involved, it is generally preferable to reach agreement before this stage where possible.

How Napthens can help

Napthens’ experienced family law team provides sensitive, practical support throughout the financial settlement process.

We will:

• Explain your legal position and the options available to you
• Advise on the best route to achieve a fair outcome, whether through negotiation, mediation or court proceedings
• Assist with financial disclosure and reviewing the other party’s position
• Negotiate on your behalf to reach a settlement
• Draft any agreement so it can be converted into a legally binding court order
• Represent and support you before, during and after court proceedings
• Keep you fully informed of progress, timescales and costs

Our aim is to help you secure a fair and workable settlement, allowing you to move forward with confidence.

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