The new rules introduced from the 5 June 2000 mean that procedures for a couple on divorce, judicial separation or nullity of marriage making an application for ancillary relief should have fewer delays for settlement and lower costs. Called the Family Proceedings (Amendment No. 2) Rules 1999 they will also give the court greater control over the conduct and proceedings. The procedure to resolve matters of money or property do not have to occur at the same time as the divorce petition, judicial separation or nullity and will often be resolved after granting of the decree or decree absolute in the case of divorce. The division of the assets or payment of maintenance can be achieved by applying for a financial order. Different orders can be applied to the matrimonial home by the court depending on the circumstances of the parties. The new rules as shown by the step-by-step guide made important changes to the Family Proceedings Rules 1991 and now will involve three stages starting with the first appointment, followed by the financial dispute resolution (FDR) appointment and if no agreement is reached between the parties the final hearing. At any stage of the proceedings either party can make an offer to settle all or part of the matrimonial assets, either as an 'open offer' or as a Calderbank letter, however it will be important for any party to take professional advice from a solicitor before making or accepting any offer.               • first appointment • final hearing     • financial dispute resolution • professional advice     • Calderbank letter

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First appointment [step-by-step guide]
To apply for a financial order and secure a first appointment with a judge the applicant must complete Form A, this being the notice of application to the court where the divorce, judicial separation or nullity of marriage took place together with Form H estimating the applicants costs as this will help the judge in making any cost orders.

The court will then notify the parties of the first appointment that must be between 12 and 16 weeks after the submission date of Form A, allowing time to serve and receive copies from the other party. After receiving notification of the first appointment the party with the pension rights must within 7 days:

A financial statement on Form E must be served on the other party and to the court no later than 35 days before the first appointment. Form E must contain information about the members pension rights including the state earnings related pension scheme (SERPS) but not the state basic pension.

The pension arrangement information will include details of the scheme provider, whether it is an occupational pension scheme such as a final salary pension or a personal pension, show the cash equivalent transfer value (CETV), any death in service benefits or lump sum death benefit after normal pension age (NPA), the projected pension income and maximum commutation to a tax free lump sum, the earliest retirement age, the spouses pension rights and dependents pension rights on death of the scheme member before and after retirement.

At the first appointment the judge will review the case and may require further information in the form of expert evidence for a valuation of complex pension arrangements such as an employers final salary pension or public service scheme or if the parties agree, to make a final order for ancillary relief. Once the court has given its direction the parties must supply the information required by the court.

If there is no agreement the case will progress to a financial dispute resolution appointment. In some cases the judge may adjourn the first appointment to allow the parties to participate in mediation. This involves a person not connected with the case to help the parties to reach an agreement and this will take place away from the court.


Financial dispute resolution [step-by-step guide]
The appointment for financial dispute resolution is an important part of the legal procedure for divorce and usually includes both husband and wife unless stated otherwise by the court. No later than 7 days before the FDR appointment the applicant for the financial order must file at the court details of all offers made to or received from the other party.

Rule 2.61E of the Family Proceedings Rules 1991 states that the FDR appointment will allow the parties to discuss and negotiate a final settlement of the matrimonial assets. This meeting should reduce the conflict around disputes over assets as each party must be open and without reserve in order to reach a settlement. As such, any evidence said or admitted during financial dispute resolution is not admissible as evidence at a future date.

The courts will expect the parties to make offers and the recipients to give them due consideration. It may be at the FDR appointment that such matters regarding the valuation of a members pension rights come to the attention of the judge, if not considered at the first meeting, at which point if there is no agreement between the parties as to the pensions expert to be appointed, the court will use its powers under part 35 of the Civil Procedure Rules 1998 instructing that evidence be given by one expert only.


Final hearing [step-by-step guide]
If during the application for a financial order and after the financial dispute resolution appointment the couple on divorce, judicial separation or nullity of marriage cannot come to an agreement over the matrimonial assets for ancillary relief, the judge will set a date for a final hearing.

At the final hearing a judge, that is not the same judge from the FDR appointment, will review the case carefully including any expert evidence where a valuation of complex pensions such as a final salary pension or public service scheme was agreed or required to be submitted, during the FDR or first appointment.

For divorce and nullity the final order cannot be made before granting of the decree nisi and the order cannot come into force until the granting of the decree absolute. The court at this stage can make the order against the matrimonial assets, or in the case of a members pension rights grant an earmarking order or pension sharing order against the retirement benefits of the parties where appropriate.


Professional advice
For a couple on divorce where there are significant assets involved such as the matrimonial home, investments or pension arrangements or where there are requirements for maintenance claims it is important to seek professional advice. Where a spouse has applied for a financial order and is in the process for first appointment, FDR appointment or final hearing, legal advice from a family lawyer should be taken before making or receiving an offer to settle in respect of the other party.

Although the basic rules are provided in the Matrimonial Causes Act 1973 (MCA 73) as to the matters to consider for ancillary relief, each case is different. The decisions of the court will be influenced by judgments reached on landmark cases, such as White v White (2000) but most importantly satisfy the requirements of both parties fairly when dividing the assets.

The layperson will typically have limited experience and knowledge of previous divorce cases whereas professional legal advice from a solicitor will provide expert knowledge of the decisions of the courts and how they have reached these decisions. Where the assets include members pension rights, the solicitor as an exempt professional firm may require additional expert evidence. This is particularly important for an occupational pension scheme such as a final salary pension where the providers CETV Method does not reflect the fair value for retirement benefits. Therefore a suitably adjusted CETV will be required reflecting the circumstances and specific needs of the parties.

In this case a pensions consultant that is qualified as a pensions expert will be able to value the pension arrangements. It is likely that a qualified expert would be a member of the Society of Pension Consultants (SPC). In order to keep the costs down to a minimum for both parties it would be appropriate if both parties came to agreement to use a single pensions expert when required by the court to provide expert evidence for such valuation.


Calderbank letter [step-by-step guide]
Where cases of divorce during ancillary relief are contested, a Calderbank letter is an important document for the parties seeking a resolution of the financial matters but in particular, they are used to limit the escalation of costs. In England and Wales the normal rules for the court is to order the loser to pay the legal costs of the winner.

It is accepted that arbitration is less expensive than the court process and therefore in the vast majority of divorce cases the parties will settle at some stage during the proceedings for ancillary relief before reaching a final hearing. A Calderbank letter is a written offer from one party to the other party to settle all the matters in the dispute on a "Without prejudice except as to costs".

This means that the letter remains confidential and cannot be produced to the court until the court has decided the percentages for each of the parties. This type of letter resulted from the decision in Calderbank v Calderbank (1975) where it was noted by the court that there should be a method available to the party making an offer to settle and for that party to be afforded protection against further costs. Either party is entitled to make a Calderbank offer whether they are the respondent or even the petitioner, at any time and as frequently as desired during ancillary relief proceedings.

During divorce procedures both parties will be able to make 'open offers' for settlement. The disadvantage of this is that the court will be aware of the offers made and this may influence the decision about the percentage in a final hearing. The advantage of the Calderbank offer, is that the contents will not be brought to the attention of the court until all the merits of the case have been considered and then only when the court considers costs. The offer should make clear the following:

As an example, party A (usually the wife) claims a sum from party B (usually the husband). Party B makes a Calderbank offer of 60% in settlement of all financial matters. Party A rejects the offer and the court eventually awards party A no more than 60%.

In this case party B will pay party A's legal cost up to the date of the Calderbank offer but the court will almost certainly order party A to pay for the legal costs of party B from the date of the Calderbank letter to the final hearing as all legal costs accrued since that date were due to party A's refusal to accept the offer. If on the other hand the court awards party A 61% or more, then party B will be liable to pay party A's costs prior to and after the Calderbank offer, as shown in the step-by-step guide.

It is essential to have professional advice from a family lawyer when structuring a Calderbank letter as a poorly judged offer could result in a significant increase in costs being awarded against the party making the offer, were this offer to be rejected and the case to proceed to a final hearing.

A correctly judged offer could result in an early resolution of the financial matters and save the party a significant amount of money. Where there are complex pension arrangements it is also important to know any adjusted CETV position before making or receiving a Calderbank offer as this will certainly influence the final percentage.   Bookmark with: What are these?       resources   divorce pages   marriage breakdown   --------- select from --------- divorce directory our services orders & enquiries divorce background divorce procedures divorce FAQs ancillary relief ancillary proceedings ancillary FAQs step-by-step guide pension on divorce pension divorce FAQs divorce law   --------- select from --------- adjusted CETV ancillary procedures calderbank letter cash equivalent value clean break court order decree absolute decree nisi divorce divorce statistics earmarking earmarking order expert evidence Family Law Act 1996 final hearing FDR first appointment judicial separation Legal Aid matrimonial assets MCA 1973 nullity offsetting pension audit pension sharing pension sharing order sharing procedures pension splitting post divorce pension spouses lost rights valuation legislation valuation report variation of settlement WRPA 1999   pension sharing   pensions in retirement   --------- select from --------- 1st December 2000 adjusted CETV cash equivalent transfer dual membership external transfer internal transfer MCA 1973 members benefits negative pension past service reserve pension audit pension credit pension debit pension sharing sharing limitations pension sharing order sharing procedures sharing benefits valuation method valuation options vary settlement order WRPA 1999   --------- select from --------- annuity annuity interest rate commutation compulsory purchase defined benefits defined contribution early retirement lump sum open market option pension drawdown pension withdrawal pension income phased retirement purchased life annuity retirement benefits staggered vesting tax free lump sum   pension audit   pension terms   --------- select from --------- adjusted CETV best advice rule expert evidence fee based adviser financial adviser G60 pensions IFA know your customer legal aid pension audit pensions expert permitted activity 13 professional indemnity valuation report   --------- select from --------- concurrent membership contributions contributory scheme critical yield gross net contributions members pension rights non contributory normal pension age pension audit pension arrangement pensionable service pensions pensions review polarisation reduction in yield regular contributions retail price index retirement age scheme member state pension age tied agent