and Property Issues
all my worldly goods I thee bestow'
Despite our marriage vows suggesting the contrary, under
the Law of England and Wales, a person does not upon marriage
automatically acquire an interest in their spouse's assets
or vice versa and upon divorce the division of assets remains
Matrimonial Causes Act 1973 sets out certain criteria which
must be taken into account when formulating a financial
settlement. How those criteria are applied varies according
to the circumstances of each case and upon the development
of case law. The court must balance the criteria in assessing
the claims of each spouse and the needs of the children.
This is a complex area of law in which we at this practice
are specialists. The following is intended as a basic outline
Specifically, upon the granting of a decree of divorce,
nullity or judicial separation, the court has the power
to make various orders for a spouse which can include the
payments (maintenance or alimony)
(maintenance that is charged against an asset)
| Lump sum (a
property (where legal ownership of an asset is taken
away from one spouse and transferred to the other)
sharing (except upon decree of judicial separation)
(see Pension Sharing)
the case of long marriages where there is a surplus of assets,
the courts have recently moved towards the proposition of
equal division of assets notwithstanding that one spouse
has played the major role in the acquisition of those assets.
In short marriages (less than five years) with no children,
the aim is to put the parties back into the position in
which they are likely to have been had the marriage not
In marriages where there are insufficient assets to provide
for both parties, particularly where there are children,
the Court may Order that the spouse with whom the children
are living shall retain the right to live in the marital
home until the children are grown up, or it may Order a
sale of the home with the majority of the proceeds going
to purchase a new home for that spouse and the children.
There are many ways in which the housing needs of the children
and the parent with care can be met and we are happy to
offer detailed advice upon this aspect depending upon the
particular circumstances of each case.
Nowadays, wherever possible, the Courts aim to achieve financial
independence from one another for both parties. This is
commonly referred to as a "clean break". This
means that in a case where ongoing spousal maintenance would
be appropriate, if there are sufficient assets to achieve
it, the maintenance will be capitalised and paid by way
of a lump sum.
In order to assess what might be a fair settlement, it is
necessary first to identify and value each spouse's assets.
It is only when the assets have been ascertained and their
values agreed, that it is possible to reach a settlement
or for the Court to properly consider the case.
cases are now settled by negotiation with the help of mediators
or by negotiation between the couple and their lawyers.
If such a settlement cannot be achieved reasonably quickly
then it is usual in divorce cases to issue proceedings for
those Orders set out at (a) to (e) above. (Lawyers usually
refer to this type of litigation as proceedings for 'Ancillary
Under the modern procedure, the Court imposes a strict timetable
for the exchange of relevant information and valuations.
The timetable will allow for two or more meetings at Court.
These will be a 'First Appointment' at which the Court will
determine the issues and consider whether sufficient information
has been provided to permit the case to go forward to the
next stage being the 'Financial Dispute Resolution Hearing'('FDR').
This is an important hearing at which the parties and their
lawyers will attend before a District Judge who will express
his views of the case and how he or she thinks it should
be settled. Many cases are resolved at this stage. If not,
they can usually proceed reasonably quickly to a Final Hearing
before a different Judge who will come to the case afresh
and will not be informed of the views expressed by the Judge
at the FDR.
Investigation of assets
It is a fundamental principle when negotiating a financial
settlement upon the breakdown of marriage, that each person
must disclose full details of their financial position to
the other and to the Court.
one party deliberately conceals or misrepresents the value
of his/her assets. In such cases, the courts have wide powers
to assist in investigating the other person's finances in
order to ascertain their real worth. Such persons may be
ordered to provide extensive documentation. Alternatively,
third parties such as bank representatives, new spouses,
employers etc., can be ordered to come to court with relevant
information and documentation.
court will also decide what assets need to be valued. Assets
such as houses, pension funds and businesses may have to
be valued. If the value of any asset cannot be agreed then
the Court will appoint a 'joint independent expert' who
will be instructed jointly by the parties and be responsible
to the Court for providing an impartial opinion.
one party can show that there is a real likelihood that
assets may be dissipated or removed from the jurisdiction
to avoid his or her claim, then an application can be made
to the Court for a "freezing" order. Where he
or she can show that assets have already been disposed of,
an "unscrambling" order can be sought. These orders
can extend to assets held overseas and in exceptional circumstances
foreign courts can be requested to assist by making a "mirror
order" freezing assets within their jurisdiction in
support of the English proceedings.
people readily comply with financial orders made by the
court, whether the order has been negotiated by agreement
or made by a Judge following a contested hearing. In some
cases, however, steps have to be taken to make one of the
parties ('the defaulting party') obey the order. The courts
have a wide range of remedies, which include:-
in the Magistrates Court This is frequently used
for the enforcement of Maintenance Orders. The order is
registered in a Magistrates Court which then takes over
responsibility for enforcement of the order. However, any
application for Variation or Commutation (Capitalisation)
of Maintenance has to be made in the Court where the original
Order was made.
of earnings. The defaulting party's employer is
ordered to deduct payments from his or her salary at source
and pay them to the claimant of to the Court. It is often
used as a way of enforcing maintenance orders.
order. The Court orders a charge to be attached
to one of the defaulting party's assets for the amount due.
Assets that can be charged include houses and shares. Once
a charging order has been obtained then an application can
be made to the court for the asset to be sold so that debt
can be paid off out of the proceeds of sale.
of an instrument. The Judge has the power to sign
an instrument (i.e. document) if the defaulting party refuses
to do so, for example, if the court has ordered that a property
be transferred but one party refuses to sign the transfer.
party debt order. The court can order people or
institutions who owe money to the defaulting party (the
third party) to pay it instead to the creditor under a court
order. Usually third party debt orders are made against
the bank at which the defaulting party has a bank account.
The order freezes the account and requires the bank to pay
sufficient funds from the account to settle the debt.
summons. This is a procedure by which a defaulting
party is cross examined before a Judge and, if they fail
to explain satisfactorily why they have not complied with
the court order, they can be sent to prison. However, the
impact of the Human Rights Act 1998 means that the same
standard of proof and evidential rights as in criminal trials
The court has the power to commit a defaulting party to
prison for failing to obey a court order. However, committal
proceedings cannot be used to enforce payment of money.
They can only be used to enforce performance of an order
or undertaking to perform a specific act (such as to transfer
a property or a life insurance policy or make a child available
are also other forms of enforcement less commonly used.
These include Sequestration (under which the assets of the
defaulting party are seized and placed under the control
of a 'sequestrator' appointed by the court), Bankruptcy
(under which the defaulting party is made bankrupt though
matrimonial orders are not provable in bankruptcy and Oral
Examination (whereby the defaulting party is required to
attend court and examined by a court official so as to disclose
details of his financial position).
is sometimes necessary to enforce orders overseas. A variety
of Conventions exist which provide for the registration
and enforcement of maintenance orders made in this country
abroad and vice-versa. This is known as reciprocal enforcement.
Under some treaties maintenance is defined purely as periodical
payments. Under others, it also includes capital lump sums.
The reciprocal enforcement proceedings available in each
case depend on the terms of the convention or other arrangements
in place between this country and the other country concerned.
many cases, the foreign court has a right to vary the order
on the application of the defaulting party. However, in
the countries of the European Union and other European countries
the judgment is fully transportable. This means that it
may only be varied, if at all, by the English court and
the courts of the other country may not refuse to recognise
it on any ground.
the absence of reciprocal enforcement arrangements, it is
necessary to commence a fresh civil action in the court
of the country concerned, seeking enforcement of the English
judgment. Enforcement by this method is generally limited
to enforcement of lump sum or costs orders and not maintenance
Provision for Children
Ursula Bagnall for a free confidential
discussion about your financial situation either following
or in the event that you are considering separation or divorce.
Even without all the necessary information, she may be able
to give you a basic 'overview' of your position and advice
as to how you should proceed.