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.
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, however it will be important for any party
to take professional advice from a solicitor before
making or accepting any offer.
First appointment [step-by-step
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
||Request from the provider of each pension
arrangement a valuation of the members pension rights;
||A summary of the retirement benefits
included in the valuation;
||When a pension
sharing order creates a pension credit, whether an
internal transfer is allowed;
||Where dual membership is not permitted,
the requirements for an external
transfer of the pension credit to another pension
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
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
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
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.
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. 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.
Where the court issues a pension sharing order that results in either an internal or external transfer of a money purchase scheme, the spouse may require further advice. If nearing retirement the spouse can use the pension fund to buy an annuity and has the option to use an open market option to search for the highest pension annuity, adding all the features necessary such as escalation, frequency of payment or a new survivors income. Once you have purchased an annuity it cannot be changed, so learn more about annuities, compare annuity rates and before making a decision at retirement, secure a personalised annuity quote offering guaranteed rates.
Open offers to settle [step-by-step
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 the final hearing. No offer to settle which is not an open offer to settle shall be admissible at any stage of the proceedings.
During divorce procedures both parties will be able to make 'open offers' for settlement.
The court will be aware of
the offers made and this may influence the decision about
the percentage in a final hearing. It is essential to have professional advice from a family
lawyer when structuring an open offer. The offer should
make clear the following:
||The specific percentage to be paid
by one party to another, this being the offer to settle
||All details of the financial matters
considered in arriving at that percentage, including pension
||The offer should give a time limit
to reply, after which time the offer would expire and
will no longer be available for acceptance.
The general rule in ancillary
relief proceedings is the court will not make an order requiring one party to pay the costs of another party. The court may make such an order at any stage of the proceedings where it considers it appropriate to do so because of the conduct of a party in relation to the proceedings (whether before or during them). The Family Proceedings Rule
2.71 considers the factors
the court must take into account when making an
order for costs, see the step-by-step
guide for more information.
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 an open
offer as this will certainly influence the final percentage.