Financial remedy proceedings, aka divorce financial settlement
Estimated reading time: 5 minutes
In some divorce cases, it is necessary for one party to apply to the court to issue financial remedy proceedings, because the assistance of the court is required to make decisions about issues upon which the parties do not agree. Court proceedings should be viewed as a last resort and the rules require parties, in all but exceptional cases, to consider mediation to resolve their dispute first.
Before initiating proceedings, the applicant must first attend a Mediation Information and Assessment Meeting (MIAM) to learn about the mediation process. If mediation is unsuitable, unsuccessful, or simply not pursued, they may then proceed with a court application.
Financial remedy proceedings are formally started by completing a Form A and filing it with the court. Once submitted, the court reviews the application, issues proceedings, and sets a timetable for the case to progress.
How the court considers your divorce financial settlement
When dealing with marital assets, the court aims to achieve a fair outcome rather than strict equality. The key principles of a divorce financial settlement include sharing, which recognises that assets accumulated during the marriage should generally be shared, and needs, which ensures both parties can meet their reasonable outgoings. In reaching a fair outcome, the court considers both financial and non-financial contributions, such as income, savings, and property, as well as contributions like homemaking, childcare, or supporting the other party’s career. The court also looks at the standard of living enjoyed during the marriage, the length of the marriage, and the future needs of each party, including housing, income, and pension provision. Importantly, the welfare of any children of the family is the court’s first consideration, and financial arrangements will be designed to safeguard their upbringing and stability. The court may also take into account any exceptional circumstances, such as pre-marriage assets, inheritances, or conduct that has affected the family’s finances, to achieve a just outcome.
Preparation: Disclosure
Once a Form A has been issued by the court, the first step for both parties is to provide full and frank disclosure, ensuring that the court has a clear picture of the parties’ financial situation. This involves completing a document called a Form E, which sets out details of income, outgoings, assets to include pensions, and liabilities together with any other relevant financial information. The court will set a date for this disclosure to be filed and exchanged between the parties. Both parties then have the opportunity to ask questions about each other’s disclosure, ensuring transparency before the case progresses.
Hearing 1: First Directions Appointment
The first hearing is known as the First Directions Appointment (FDA). This is essentially a case-management hearing. The judge reviews the financial information provided and decides whether any additional evidence is required before the case can proceed. For example, it may be necessary to obtain a property valuation a pension report, business accounts, or to resolve queries arising from either party’s financial disclosure. The judge will give directions about what evidence must be gathered and by when, to ensure both parties have the information needed for constructive negotiations.
In some cases, the FDA can be fast-tracked, provided both parties are satisfied with each other’s disclosure and agree on the value of all assets.
Hearing 2: Financial Dispute Resolution Hearing
The next stage is the Financial Dispute Resolution hearing (FDR). At this hearing, both parties present their divorce financial settlement proposals, and the judge gives an indication of what a fair outcome might look like if the matter proceeded to a Final Hearing.
The FDR is conducted on a “without prejudice” basis, meaning that the discussions cannot be referred to later if an agreement is not reached. This provides a safe environment for open negotiation. Many cases settle at this stage, as the judge’s indication often gives parties a useful reality check and encourages compromise. This hearing is often very effective and most cases settle at this stage or shortly after.
Hearing 3: Final Hearing
If the parties are unable to reach a settlement, the case proceeds to a Final Hearing. At this stage, the judge hears formal evidence from both parties, reviews all relevant documents, and considers any expert reports. The judge then makes a binding decision on how the parties’ assets and income should be divided.
Because the Final Hearing is typically the most time-consuming and costly stage, it is generally viewed as a last resort when negotiation has failed.
Achieving a divorce financial settlement before the final hearing
In many cases, financial remedy proceedings are instigated with the hope that an agreed divorce financial settlement can be reached before the Final Hearing. Indeed, it is expected that the parties will be actively negotiating throughout the court process, with the aim of reaching an agreement as soon as possible. If the parties reach an agreement, a consent order reflecting the terms of the settlement will be prepared, sealed by a judge, and the proceedings will be concluded.
Alternative means of resolving disputes
Our primary aim is to help clients to achieve a favourable outcome for their divorce financial settlement in the most amicable and efficient way possible. While court proceedings are sometimes necessary, the courts now expect parties to engage meaningfully in non-court dispute resolution (NCDR). Before the FDA, parties must complete a Form FM5, setting out the steps they have taken to resolve issues without court involvement. This reflects the court’s emphasis on exploring alternative dispute resolution methods, such as mediation, arbitration, and negotiation, wherever possible. These rules are designed to encourage cooperation, narrow the issues in dispute, and reduce unnecessary delays and costs, while still allowing the court to intervene when agreement cannot be reached.
If you are interested in exploring NCDR, you can read more about the available options here.
Family Law in the City offers an initial free, no-obligation call to discuss your situation.
Author bio
Steph Espinosa is a family law solicitor at Family Law in the City, where she has been part of the team since the firm's founding. She qualified in 2021 having trained at Winkworth Sherwood LLP and advises clients on divorce and separation, financial remedy proceedings, children arrangements, and pre- and post-nuptial agreements. For a confidential conversation, complete our contact page or call the office on 020 4579 5360.
Frequently asked questions about divorce financial settlement
Is everything split 50/50 in a divorce?
Not necessarily. Equal division is often a starting point, but the court's role is to achieve a fair outcome rather than apply a formula. The factors the court must consider under section 25 of the Matrimonial Causes Act 1973 include the length of the marriage, the needs of both parties, the welfare of any children, earning capacity, non-financial contributions such as childcare, and the standard of living during the marriage. In practice, most settlements are reached by agreement rather than decided by a judge, but any agreement needs to be reflected in a consent order to be legally binding.
What happens if we can't agree on a financial settlement?
If you and your ex-partner cannot reach an agreement through negotiation or one of the non-court dispute resolution options, it may be necessary to apply to court for a financial remedy order. Court proceedings are a last resort, and in most cases, an agreement is reached before a final hearing. The process involves formal financial disclosure from both parties, and hearings at which a judge may give an indication of the likely outcome. Getting early advice on what a fair range of outcomes might look like can help both parties move forward more efficiently.
Do I need to sort out finances at the same time as the divorce?
The divorce process and the financial settlement are legally separate, but they run concurrently in practice. Crucially, completing a divorce without addressing finances does not bring your financial claims to an end — your ex-partner may still be able to make financial claims against you years later. The only way to achieve a clean break is through a properly drafted and court-approved financial order. It is therefore almost always advisable to deal with the financial settlement as part of the same process.
Does it matter how my ex behaved during the marriage?
In most cases, conduct during the marriage will not affect how assets are divided. The law applies this principle narrowly. However, deliberate financial misconduct, such as recklessly spending or concealing matrimonial assets, may be taken into account. If you have concerns about how assets have been dealt with, or believe your ex has not been fully transparent in their financial disclosure, that is worth raising with your solicitor at an early stage.
