Separating from a partner or spouse is a big decision and must be given careful consideration. Separation or divorce will have a financial impact on every family, regardless of how amicable the split might be. Therefore, there must be consideration of what resources are available to meet day to day expenses, housing costs and legal fees to make sure that any solution is affordable. Every penny counts and is best applied towards the needs of the family.
Taking legal advice before deciding to separate, and during the early part of the process, can be extremely effective. It assists parties to make informed decisions about how to proceed, and ultimately help to avoid long and expensive legal battles or costly court proceedings. Expert legal advice generally comes at a cost, and therefore it is imperative that anyone contemplating divorce or separation considers where they will obtain their legal support and how they will fund it. There are many ways to keep legal fees affordable when trying to agree arrangements for children, or how assets should be split, including keeping disputes out of court.
What legal options exist for resolving parenting and divorce disputes?
There are a variety of legal options for resolving your parenting or divorce dispute outside of the court arena. Firstly, it is possible for you and your spouse or partner to negotiate and agree what should happen between you. There are many benefits to this, including remaining in control of the process and promoting communication and cooperation between you. It will also allow you to keep your legal fees to a minimum. However, it isn’t always possible to resolve issues directly, especially where emotions are running high.
Where some professional input is required, it is possible to use processes such as mediation, solicitor supported mediation, collaborative law, arbitration, private FDR hearings, or even the Resolution Together, One Couple One Lawyer model. These options are all different, and should be explained to you at the start of your matter, so that you can decide which works best for you. These options are often referred to as Non Court Dispute Resolution options (NCDR) and must be considered before issuing court proceedings.
Mediation involves appointing a neutral third party mediator who helps facilitate discussions between parties to narrow the issues and resolve disputes. You can either attend mediation alone, or be supported by your solicitor who can attend mediation, or simply provide support in the background. Importantly the mediator does not make a decision about what happens, and neither party is held to any agreement reached, unless it is later turned into a court order.
Collaborative family law is where disputes are resolved by way of a series of round-table meetings. Both parties agree not to issue court proceedings, and letters are not written back and forth about the case. The meetings are very much client led, and solicitors and other third party experts (including financial advisers or accountants) can also attend to assist in moving matters forward. Again, an outcome is not imposed upon the parties and the aim is that they reach an agreement by way of collaboration.
Arbitration is different again. The parties jointly select and appoint an arbitrator to act as a private Judge. There will be a hearing akin to a court hearing, and the arbitrator will impose a decision on both parties which is binding and must be adhered to. The arbitration award is converted into a financial order and endorsed by the court. The arbitration process is usually much quicker than the court process, and may save the parties money (albeit the arbitrator is an upfront additional cost).
It is not always possible to use an NCDR options. Court may be required when, for example, one party is not engaging or cooperating. If they are not responding to requests to mediate or arbitrate, you are likely to need a court order to try to force them to engage. Ultimately the court can make orders against someone that does not participate provided it can be demonstrated they have had every opportunity to be involved. The same can be said of when someone is not providing financial information, and a court is able to force someone to do so, or ultimately penalise them by way of orders, costs orders or even imprisonment if they do not comply.
There are also cases where NCDR options are simply not appropriate, for example, where there has been domestic abuse in a relationship, or where there is a clear imbalance of power between a couple. Ultimately both parties need to be willing to engage and feel comfortable to resolve a dispute together using NCDR.
How can families access cost-effective legal support?
When thinking about how to access legal support parties can look at a range of options. Limited free advice can sometimes be obtained from organisations such as Citizens Advice or Support Through Court, but this is not a substitute for taking advice from a lawyer. Legal aid is still available in very limited circumstances for family disputes where there has been evidence of domestic abuse and assets are very limited, or in parenting disputes where a child is at risk of harm.
Fixed fees may be offered by some solicitors, however, this is not always appropriate. Others offer a free or low-cost initial consultation in order to give some initial advice or answer specific questions. It is possible to fund legal fees by borrowing money, whether from family or friends, commercially from banks, or alternatively by way of a litigation loan. In financial matters, any borrowing will be factored into any financial settlement.
An initial low cost or free consultation can be an extremely helpful starting point for someone considering separation, as it is an opportunity to ask questions and to get some initial advice. The solicitor can highlight issues to think about and agree a plan to move matters forward. This will help a client to potentially limit costs moving forward, as well as make informed decisions about next steps.
As referred to above, mediation can be a cost-effective way to resolve divorce or parenting disputes where parties are able to communicate. For many people, it is most effective to have advice from a solicitor alongside the mediation process so that mediation is as productive as possible. A solicitor can explain the process in advance and what is to be expected. They can also advise in relation to potential outcomes, and how best to negotiate, with an aim of reaching an agreement with as few sessions as possible. Such an approach can help to reduce costs.
What role do pre-nuptial and post-nuptial agreements play?
A prenuptial agreement is a written agreement between a couple entered into before marriage which sets out what should happen in relation to financial matters on a divorce. A postnuptial agreement is essentially the same, but entered into during the marriage. These agreements, where executed properly, can significantly reduce the potential for dispute on divorce as absent any good legal reasons, the parties will simply implement the agreed terms. This can really assist with not only keeping acrimony to a minimum, but legal costs as well.
Prenuptial and postnuptial agreements are not just for high-net-worth clients, they can be useful for everyday families where there are assets to protect and share on a divorce. It is worth taking legal advice in the early stages of a relationship about the legal impact of moving in together, getting married, and what can be done to protect your financial position. Planning at an early stage can save legal costs further down the line.
How do private wealth considerations affect funding options?
Eligibility for legal aid is complicated and you should seek advice from a firm which is able to offer it. Most scenarios where legal aid is available clients would be subject to means testing. To potentially be eligible for legal aid, your income must be under a certain level and you must have limited savings, and not own property with a certain level of equity. In reality, legal aid is only available to a very limited number of people.
Where you earn in the region of £30,000 to £70,000 per annum, it might be that you are able to meet some of your legal costs out of your own income and savings. Alternatively ,it would be appropriate to look at utilising credit cards, bank borrowing or borrowing from family or friends.
As set out above, looking at ways to minimise legal costs and deal with your disputes efficiently and out of court can help you save on legal costs. Utilising mediation and other out of court options can assist with this.
When is mediation or collaborative law a better option than litigation?
NCDR options such as mediation or collaborative law are almost always a better option than litigation, as they can save time and money, and allow parties to remain in control of the process. As set out above, there are instances where there is no other option but to litigate. It should however, be a last resort where possible, given the potential for high legal fees and delays.
Resolving matters out of court can help parties to maintain a good relationship after their separation. For example, it can encourage a collaborative approach, good communication and to see the other person in a positive light. This can be particularly important where children are involved, as their welfare is paramount. It allows parties to remain in control of the process and to reach appropriate compromises.
How can families plan ahead to avoid disputes or reduce costs?
Taking early legal advice can assist families in clarifying expectations around outcomes and how a process for resolving their issues will work. It can help families to look at a financial settlement alongside arrangements for children and what realistically is going to work for them as a family and what will be considered a fair outcome.
Working together collaboratively in an out of court process can help parties see the situation from the other’s perspective, and to keep the children’s best interests at the heart of discussions. For example, working together with a parent in mediation to produce a parenting plan can make sure all aspects of a child’s care is considered and that the parents remain focussed on doing what is best for them.
How our team supports families through affordable legal options
Our family team will advise you of what funding options are available to you at the start of your matter so that you can carefully consider how to proceed given your circumstances. We will also set out the various ways you can look to resolve your dispute, along with the pros and cons of each, so that you can choose the route that is best for you and your family.
We work collaboratively with our colleagues in other teams, to make sure that you receive the holistic legal advice you need in relation to your divorce, separation and beyond. For example, we regularly work with our private client teams in respect of wills and tax planning, our property team in relation to property transfers and sales, and our corporate team in relation to how best to deal with business assets.
Regardless of whether you are a moderate, high or ultra-high earner, we will be able to provide you with appropriate advice about how best to deal with your family law dispute in the most cost effective and efficient way.
Please get in touch with our Family Law team if you are looking for advice.