On divorce, the cost of an application to the court to resolve financial division of a marital asset base averages between £8,000 - £25,000 per person. The cost can be significantly more than this and in addition the court process is slow and cumbersome compared to most people’s expectations. There is a growing realisation that although this is the legal process historically available, people have the power to choose alternative ways of dealing with finances that better suit them. There is a growing trend in people asking for a co-operative process of settlement which recognises they may need some level of legal expertise but in a far simpler, more useable format. Any process that is proportionate to the person’s individual circumstances, which allows co-operation rather than polarisation, and can be quicker and cheaper, is going to be attractive. Why wouldn’t it? It is a matter for solicitors to act responsively to what clients are seeking rather than expecting clients to accept what has previously been offered, simply because this is how solicitors are used to working.
Prettys has long offered the use of settlement by negotiation through round table style work headlined by our Talking Works process. We are seeing an increasing number of cases where clients are only interested in cooperative working. Clients do not want to spend vast sums of money on going to court, and taking 1-2 years to do so, but would rather spend less than £5,000 together and achieve both a divorce and a financial order for that expenditure. Many cases simply do not need the level of legal fees historically charged for an effective outcome, if co-operative negotiation can be used.
There are a number of defining factors that make this approach more or less likely to work:
1. The parties need to be able to prioritise a common sense approach towards resolution that overrides the impact of the emotional tensions that can result from the ending of a marriage. Many people acknowledge that the fact of the marital breakdown indicates that neither is necessarily flavour of the month with the other. However, if proper direction is applied by expert family solicitors the parties are still realistically able to work together to manage the ending of the relationship. For many people ending a relationship, some degree of concern for the other prevails, particularly where there are children. A process that reflects this is seen by many couples as an outcome which should be preferred. This does not mean that the couple need to have achieved a constant state of calm in their dealings with each other for this approach to be effective. Just as there is emotional variance during the marriage, there is always likely to be emotional ups and downs during the ending of the relationship. The test is rather more about the ability to hold onto the goal of co-operation whilst there are ups and downs, rather than letting that volatility de-rail the process.
“I may not want to live with my husband anymore but I don’t want to have a process that makes us hate each other or makes us work against each other. It’s so unnecessary. You need to find a solicitor who works co-operatively.”
2. There has to be enough co-operation to sufficiently identify the financial asset base and have sensible dialogue about the needs of each in the division of that asset base. There are some couples much further down the road of understanding the asset base and how to divide that base, before they take legal advice. Others need legal advice first. The understanding of the value of the asset base is an imperative whichever process is used to resolve financial claims. The process of financial disclosure can however be flexible to suit the needs of the individual case. The court process uses a Form E to identify financial assets. For some people Form E in a voluntary process will be appropriate and for others it will not. The beauty of dealing with the case cooperatively is that the type of disclosure can mirror the needs of the case. The test is that both parties properly understand the value of the assets that exist before they make decisions about how those assets are divided. This extends to all of the types of financial claim to the marriage whether of an income, capital, property or pension nature. A bespoke consideration of financial disclosure can be much more valuable to the parties and saves considerable time and effort. For example where the couple separating have limited pension provision, utilising a process which spends time and money on valuing pensions may be of less relevance to what they want to achieve. Where, however, there are significant pension assets for just one of the couple, understanding the true value of that asset to achieve fair outcome is going to be far more important. There are other examples where proportionality is important to the needs of the case. A standard Form E requires 12 months’ worth of bank statements for every bank account. For couples who have a good understanding of the workings of those accounts, financial disclosure can be short-circuited to that which is more appropriate.
3. The ability to work together generally means that there has to be some level of trust still left between the parties, even if it is pragmatic trust. For example, if a relationship has broken down because one party has formed a new relationship with someone else whilst in the marriage, the parties need to mutually decide whether this still allows sufficient trust for discussions on financial or children matters. For some the answer to that question is an easy “yes” and for others it is not. Similarly, if one party hides assets or fails to give sufficient financial understanding to the other for that person to make informed decisions on solutions, then a cooperative process by negotiation is less likely to be appropriate. It is not the case that negotiation by cooperative process can be used for all cases – there will always be a minority that may need the court process. The difficulty is that the court process is being used for cases where a cheaper, quicker, more constructive process could easily have been utilised.
“It was always clear that I was in charge of the decisions but on the basis I had been given enough information to be able make the best decisions. It would be so easy to feel overwhelmed by the whole process but instead I felt supported.”
4. Once the needs of financial disclosure have been agreed and the information obtained, the discussion on how to divide the asset base can again suit the needs of the case. However, both parties have to want some format of dialogue. There can be:
- round table meetings (or video call in Covid-19 times); or
- the solicitors (if both parties are instructing a solicitor) can have a scheduled telephone conference to progress sensible division, knowing each client’s position. It is possible to have written correspondence to progress matters but on the whole, the process works best where there is verbal interaction because there is the benefit of speed and a better opportunity for a fuller understanding of the issues. Written correspondence can often, when attempted for negotiation, be less nuanced and less explorative, therefore less constructive; or
- the solicitor can provide his/her own client with sufficient information so that the parties can discuss matters directly but with background support and as against the framework of the client understanding the important legal aspects which need to be covered; or
- there can be use of other resolution process such as mediation or agreed joint use of experts to overcome points of conflict, if there are any, where this particularly suits the needs of the case; or
- any hybrid combination of the above. As long as the way of working is understood, agreed and sensible to the needs of the case, anything reasonable can be contemplated to aid the parties to fair and swift resolution. This flexibility is the hallmark of co-operative negotiation and allows significant control to the parties. It is all the difference between being offered a service that fits the couple rather than a couple having to fit a process.
5. The choice of solicitor is significant to the decisions made at the onset about how the case should progress. Once on the path of traditional process it can be hard to shift to co-operative negotiation. Family solicitors that have historically utilised the structure of the set legal process are going to struggle to look at the actual needs of the client in front of them, and working proportionately to the needs of that case. Without this ability there will always be more focus on the traditional process of correspondence in writing and the use of the court as the default when the arm’s length correspondence fails. It is a question of using the expertise of the solicitor to identify technically what the case requires so that a streamlined process is offered that fits the individual needs. The outcome has to be legally robust and fair, but recognising that legal costs should be more mole hills than mountains.
Georgie Hall is Partner and Head of Private Client at Prettys. She is a family lawyer, mediator and collaborative lawyer with over 25 years’ experience. Georgie also trains other family lawyers on the art of negotiation at a national level for Resolution.
If you are interested in understanding more about how Prettys’ Family Team works by way of cooperative negotiation then do not hesitate to contact Georgie Hall (firstname.lastname@example.org).