Divorce can be stressful and difficult for most, but this can be amplified when parties cannot reach an agreement. This can lead to a court battle ensuing, which means large courts fees and diminishing assets as a result of these fees. Disagreements between parties can mean that an expert is needed to be appointed to determine the value of assets or a barrister will be required for court appearances, which means extra costs on top of the usual solicitors’ fees.
In the event there is a lack of trust between the parties due to, for example, a perception that one party has undisclosed assets or hasn’t been truthful about financial matters a court process will be more common and a final hearing more likely.
Parties resolving financial matters on divorce are encouraged more and more to consider dispute resolution. The government has tried to encourage mediation by making it mandatory before any court application is made. Mediation can be effective and a cheaper option than negotiating through solicitors. It also allows parties to discuss matters directly without third parties becoming involved, which reduces the chance of misinterpretation. Lawyers are only required to finalise an agreement, but the costs of this are much lower than the lawyers negotiating on behalf of parties, which can take considerably more time.
Another option is collaborative law, where both parties instruct trained collaborative lawyers and sign an agreement that prevents each spouse from making an application to court using that lawyer. All discussions are made in person and the lawyers work together to help parties to reach an agreement. The agreement will be drawn up and finalised as part of the process. This process is mostly led by parties and although it is cheaper than the court process, it is more expensive than mediation as both parties have legal representation. This can, however, help to even out the balance of power by the collaborative lawyers, if there is an imbalance of power.
Parties are able to resolve matters even after a Court application is made. Many can come to an agreement at some point before a court decides and orders what happens to the assets at the final hearing. Parties who are open and honest about financial matters, and who are able to communicate directly, are more likely to spend less on legal fees and therefore retain more of their asset base rather than reducing it due to further costs caused by disagreements.
Dispute resolution is also more likely to leave parties in a position where they are able to speak to each other and continue a relationship. This is particularly important if there are children involved or a family business which needs to continue running in order to support the family.
This article was written by Sitem Yazgili, a paralegal at Posada & Co.