Should the ancillary relief system be revised?

Divorce|March 16th 2010

A partnership is broadly defined as members of a common business venture. I like that description, with its emphasis on “business”. Ideally, the client and the family lawyer work together through the legal process until it reaches its natural conclusion. Our relationship throughout is strictly commercial, with input from each partner. Our contributions are naturally different, but more or less equal. Any differences that arise during our joint venture are discussed between us and resolved amicably. The client has the final say. When the “business” has been completed, our partnership has run its course. However, I believe the process isn’t necessarily designed to encourage this idealistic type of partnership. I also believe that it can put serious strains on the solicitor-client relationship at the most vulnerable point in the process, which in some cases can rupture the partnership irreparably.

I have often wondered whether the period between First Appointment and the Financial Dispute Resolution appointment needs to be reconsidered in greater detail. Perhaps an automatically listed hearing could be interjected, to ensure that clients remain fully involved in the case and satisfied with its progress prior to the FDR. Let me explain.

A new client came to see me. She was seeking a second opinion. The client insisted that nothing was wrong, but that she just needed “reassurance”.

The client came with her friend, a man who had also been a client of ours.

Before the meeting I read the client’s file forwarded to me from her firm of solicitors. I noted the intricacies of the case. I also noted that she was in that difficult period between the First Appointment and the Financial Dispute Resolution. It is a stage at which clients are often in need of reassurance: their nerves are building, they become worried about costs and they can panic that “nothing seems to be happening”. That was exactly what had happened here. The client’s questions and meetings with her lawyers had not calmer her. Instead they had panicked her, because she too believed that “nothing was happening” – while her husband was being allowed to run riot and have control of the process.

Behind the scenes

There is no doubt that up to the First Appointment, the client is heavily involved in the case. A great deal needs to be accomplished within a short period of time. The divorce petition and accompanying papers must be issued. The Finance Application (Form A) needs to be issued. The complicated financial disclosure document (Form E) needs to be completed. The other party’s Form E must be considered, after which a Questionnaire and Statement of Issues and Chronology need to be agreed.  Plenty happens and the client is heavily involved. A great deal of work takes place.

From a client’s perspective, this momentum can seem to slip away after the First Appointment. It is at this point when matters that have been progressing neatly can become fraught and drawn out. Each side has to comply with the orders that have been made, and this is often when arguments begin. Some people refuse point blank to comply with the orders. They may do it deliberately, in an effort to “outgun” the weaker side on costs. They refuse to comply, even when ordered to do so. They know that lots of costs will be racked up chasing compliance. They can stymie the proceedings. They don’t care, because all “their” money is at stake.

In many cases, arguments can quickly develop – even when there are orders for the orderly progress of the case made at the First Appointment. Perhaps there is an order for the valuation of a property or a business, but there are arguments about which valuers are to be instructed, or the precise terms of the instructions to the valuers. Perhaps there are arguments about which documents are to be disclosed to obtain the valuations. Perhaps when valuations are received, the valuers’ conclusions are disputed. Such arguments and aggravations can apply to properties, pensions, businesses and investment assets.

During this time there may be plenty going on behind the scenes. However a client who is not involved in this process may feel that he or she is in limbo, with legal costs mounting by the day, no obvious reason why and nothing to show for them.

Such a situation may be further exacerbated by the pressures under which our courts currently operate. The waiting times for some cases in Central London, before the High Court, can be more than a year from the First Appointment. In other cases it can be several months.  It is little wonder, therefore, that clients need plenty of reassurance at this stage – and that many become increasingly desperate.

At the outset of a case, solicitors give a cost estimate of the likely cost of taking a case to a final hearing. In most cases it is assumed that there will be few problems. In my experience this period between the FDA and FDR  is becoming increasingly fraught, especially as the recession has bitten, with valuations differing wildly and incomes being thrown into turmoil.  There are ways of dealing with non-compliance via the court, but it can be difficult to obtain orders and it can be costly. A costs estimate can be superseded, and clients can begin to panic as updates arrive. Such is the current system.

I pose the question: should a further routine hearing be an automatic part of the process, to deal with these problems in the lead time up to the FDR and to knock out as far as possible the arguments in this period?

I know what the counter arguments will be. After all, freestanding application can be made in any event. This is true, but I think that for the conduct of all cases and the benefit of the parties, it should be automatic. It could also be argued that there will be increased costs and increased pressure on the courts – but would there? If there was another short hearing, which the parties could potentially dispense with by agreement, wouldn’t everyone do their best to comply and avoid criticism? Or if a new hearing did go ahead, couldn’t this court time be used sensibly to cut through any arguments that had developed and thus save costs in the long run? And wouldn’t it give another, earlier opportunity to try and settle?

“You don’t end a football match at half-time”

For now, the system doesn’t automatically provide for a further hearing. In the particular case that we were asked to take over, it seemed to me that the only problem was one of proper communication and an explanation as to why the costs were increasing.

The solicitor had been working diligently, but it wasn’t a straightforward case and she had taken the brunt of its complexities and challenges upon herself without keeping the client fully updated. She had wanted to minimise time, trouble and stress for the client – and it certainly looked as if her work would bear fruit. However the commercial partnership between the two of them had ruptured, because of the client’s perceptions of the increased costs involved. The solicitor’s work had been appropriate, but her work couldn’t be fully appreciated because by shielding the client instead of involving her, she had left the client with a skewed view of her own case and dramatically increased costs.

At the meeting, once this situation became clear, our own business partnership was formed. As the client’s friend said to her: “You don’t end a football match at half time – and that’s where you are at the moment! So it seems to me that an understanding of this dangerous and flawed period, in a system designed overall to ease settlement, is vital for the success of any solicitor and client relationship.

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  1. Mediation: the importance of legal qualifications - Marilyn Stowe Blog says:

    […] with the nonqualified mediator, she was at pains to assure me she wouldn’t deal with a complex ancillary relief [financial settlement] case, but when I asked, she couldn’t tell me what ‘complex’ […]

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