Financial Fairness: Understanding Disclosure and Division

In order to resolve the financial claims arising from a marriage conclusively, a Financial Order must be approved by the Court, and the Court will only seal an Order which it considers fair. It is, therefore, important to understand how fairness is viewed in the Family Court. 

There is an ongoing obligation for parties to provide full and frank financial disclosure. This obligation applies both to Court proceedings and negotiations outside of Court. When a financial agreement is submitted to the Court for approval, it must be sent with a summary of the parties’ finances and confirmation that both parties have seen each other’s financial disclosure. 

It is standard practice, therefore, for lawyers to suggest parties exchange their financial disclosure in the same format used in Court proceedings, known as a Form E, on a voluntary basis. There are then opportunities for each party to raise additional questions or request additional information.

Once the parties are satisfied that they have received full and frank disclosure, they will try to negotiate a settlement. The Courts will consider all financial settlements against the “yardstick of equality”. This means that the starting point will be an equal division of the matrimonial assets. There may then be deviations from this starting point in order to meet one party’s greater needs or, in exceptional cases, to compensate one party for economic disadvantage as a result of decisions made during the marriage, such as giving up a lucrative career. 

The Court will also give consideration to the factors in s.25 of the Matrimonial Causes Act 1973, which looks at factors including the parties’ financial resources, their needs, their ages, the duration of the marriage and their standard of living during the marriage. 

Even in cases where the parties agree how to separate their finances, it is important to take legal advice on whether the agreement is likely to be regarded as fair by the Court and how to go about submitting the agreement to the Court for approval. 

For more information on any of the issues raised in this article, please contact Rebecca Curran, Paralegal in the Family Law Department at SE-Solicitors at rcurran@se-solicitors.co.uk.