This post is part of a series about the Family Procedure Rules 2010, which focuses upon some of the most important changes for practitioners and clients. Today we are going to look at Part 9 of the Family Procedure Rules 2010: Applications for a Financial Remedy.
Earlier in this series I mentioned that the new Rules feature new terminology. It is time to say goodbye to the archaic term ancillary relief, and hello to the financial order.
(For non-lawyers: a financial order, which used to be called ancillary relief, is what you apply for during divorce, civil partnership or judicial separation proceedings.)
The financial order also forms part of the new, generic term financial remedy, which encompasses all forms of financial relief. It includes applications for financial provision for the children of unmarried parents, (Schedule 1 of the Children Act) applications for financial provision after an overseas divorce and applications to the magistrates’ courts for which the procedure differs.
The two new terms are defined in the Family Procedure Rules 2010 by Rule 2.3 (page 29). A financial order is defined as:-
(a) an avoidance of disposition order;
(b) an order for maintenance pending suit;
(c) an order for maintenance pending outcome of proceedings;
(d) an order for periodical payments or lump sum provision as mentioned in section 21(1) of the 1973 Act(a), except an order under section 27(6) of that Act(b);
(e) an order for periodical payments or lump sum provision as mentioned in paragraph 2(1) of Schedule 5 to the 2004 Act, made under Part 1 of Schedule 5 to that Act;
(f) a property adjustment order;
(g) a variation order;
(h) a pension sharing order; or
(i) a pension compensation sharing order;
(“variation order”, “pension compensation sharing order” and “pension sharing order” are defined in rule 9.3.)
For those who would like more of the highly technical detail about application procedure, which is governed by Parts 18 and 19 of the Family Procedure Rules (pages 185 – 189), I recommend that you pause here and read pages 25 – 33 of John Wilson QC’s paper. He describes the application procedure as “similar to the old difference between writ actions and originating summons”.
Practitioners, applying for a financial order on divorce, will note that the forms are not markedly changed and the procedure is much as before. It is set out at Rule 9.12 to 9.17 of the Family Procedure Rules 2010 (pages 82 -85).
Indeed, the law itself has not changed. A financial order may be made because there is power in the court to do so under the Matrimonial Causes Act 1973. I was hopeful that small changes to the law might be introduced, to assist the overriding objective: perhaps interim lump sum orders, and also orders for sale of a property at an interim stage. However that is not (yet) to be. So anyone who wishes to obtain an order for sale, when the other spouse is doggedly refusing and defending divorce proceedings, will still find that the only option is to make an expensive and longwinded application under the Trusts of Land And Appointment Of Trustees Act 1996, just as unmarried couples are obliged to do.
Instead, let’s concentrate on achieving the overriding objective in financial cases. The protocol annexed to Practice Direction 9A provides guidance. It begins with advice as to the tone and content of the first letter to the other party, and the conduct of the case before and after the issue of proceedings. The protocol is not new, it is not lengthy and it is a judicially approved guide as to how best to proceed.
The protocol applies to all applications for a financial remedy, in all types of financial cases. From the outset it is made clear that there are clear advantages to issuing an application to the court and having a court timetable and court-managed process.
Clients often think, wrongly, that costs will always be contained if the case is kept out of court. In truth, that rarely happens. One way to contain costs is to apply to court as quickly as possible, to keep the case court-managed and ensure that both parties fully cooperate. It is frequently a mistake to agree to a voluntary exchange of information because it has no “teeth” and time can be wasted going down a blind alley, particularly if the assets are complicated. There is a manifest difference between dealing with a case in which there is a straightforward source of income and agreed sums of capital, and a case in which there are business interests, offshore assets, trusts, different sources of income, pensions and so on.
My view is that when the finances are likely to prove contentious – for example, when there are going to be likely arguments about asset values, and the incomes and needs of both parties – there is little point in waiting or advising a client to mediate at the beginning. Such a step would only increase the overall costs.
If you are a client, rather than a solicitor, reading the protocol may also help you to understand why your solicitor might not appear as aggressive as you would wish. For example, your solicitor may write a letter to the other side and you, being deeply hurt, don’t think the letter is “tough” enough.
On the other side of the Atlantic, the approach is very different and lawyers will even advertise how aggressive they are, in order to gain clients. I once saw an advertisement for an attorney called “Battling Bill”. Here, however, that kind of approach is heavily frowned upon. It is likely that if your solicitor writes a letter that isn’t “tough” enough, it is because he or she does not wish to prejudice you later in court. When I write letters, in my mind’s eye I am always writing them to the judge. A solicitor must consider the effect of correspondence on the other party, and avoid a “trial by correspondence”. You don’t want a costs order against you, as a result of an overly aggressive and hostile approach.
What is expected of the client?
As I have emphasised throughout this series, a client has a duty to cooperate with the process and remain open to means of settling the case, in order to achieve the overriding objective. That is to enable the court to deal with cases justly, having regard to the welfare issues involved
One final point is this. The pre-action protocol expressly refers to the continuing obligations of the parties to make full, frank and honest disclosure of all material facts documents and other information relevant to the issues. Solicitors are also reminded of their duty to advise their clients of this obligation, and that breaches risk criminal sanctions under the Fraud Act 2006. Statements of Truth are now required on some forms, and a solicitor can sign on behalf of a client if authorised. See Practice Direction 17A for more information. I don’t think that I would ever wish to sign on a client’s behalf: it strikes me that this option is likely to be fraught with difficulty.