Financial Remedy Proceedings

In some circumstances, 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 finances

When dealing with marital assets, the court aims to achieve a fair outcome rather than strict equality. Key principles 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, in order 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 Form a 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 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.

Settlement Before Final Hearing

In many cases, financial remedy proceedings are instigated with the hope that an agreed 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 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.