General Information – Financial Mediation

In divorce the aim is to achieve a financial order so you can both move forward as separate individuals with control of your own finances now they are no longer shared.

If you are not married and are separating it is advisable to make a separation agreement.

If you have children any decisions you make will have to ensure their future safety, well-being and financial security.  Demonstrating how you achieve this will be both central to your negotiations and essential if the court is to support the plans you intend to put in place following your divorce or separation.

Why do I need a Court Order?

Achieving a Financial Consent Order as part of a divorce provides legal certainty about the proposals you have agreed and prevents both people being exposed to future claims (unless there are spousal maintenance provisions included in the proposals) being made against each other.

Before you can obtain a financial order, you have to go through a process of full financial disclosure. This means gathering together all of your joint and separate assets, liabilities, pensions etc as set out in the following forms. This should form a complete picture of your financial relationship. You will need to provide supporting evidence about the statements you make and these documents will be needed by your solicitor and the court. It is based on this evidence that the court will grant your financial order.

How to achieve financial disclosure?

There is a three-stage process :

• Firstly, you both gather together your joint and individual financial information. Once complete these are then exchanged with your ex-partner.
• The mediator will draft a schedule of assets and liabilities based on the information you have both provided.  This is an open document and therefore is not confidential.  Some mediators will provide this in draft form before your first joint meeting.  Some mediators prefer to draft the schedule with you together. The mediator will discuss how this is achieved with you at your MIAM meeting. 
• Once the draft schedule is complete and you are both satisfied that it provides a complete picture of your financial position, you can then start to look at how you will divide your finances.  You will be able to put forward your proposals for the division of your shared pot based on what you believe is right and fair – but also realistic because you will each know how much there actually is to divide.  It is in these negotiations that the mediator will support you to make the best decisions for you and your family.

Initially your disclosures may be approximate, because up-to-date information is not yet available to you; this is no problem because our system allows for updating and amendments.

It may be that you each have different views on the value of items or the percentages held of jointly owned assets; your mediator will be aware of any differences between your disclosures, and will help you resolve matters, to ensure an agreed starting point to your negotiations.

Of course you may wish to ask questions of each other’s disclosure, and your mediator will help with that.

A key issue for you may be to have the accuracy of the other party’s figures confirmed with clear evidence; again, this is provided for because documentary evidence will be required to support each entry. Our process will ensure that evidence you have provided to us is made available to the mediator, and is shared with both parties.

Our process will ensure that your negotiations are based on a transparent picture, required by law to be accurate and comprehensive, of your total financial resources, anywhere in the world.

Exchange of Evidence

During the mediation sessions the mediator will display all your figures for everyone in the room/screen to see so that you can work on them together.  You will obviously wish to be certain that the disclosure made by the other party is complete and accurate. For this reason, you will both be required to provide back-up documentation for every entry you have made in the form; in the case of bank statements, these will need to go back 12 months.

What this means is that, following this process, you can be certain of the accuracy of the information you provide, and can ensure that the other party is equally certain. Your mediator will advise you as to when and in what format he/she wishes the back-up evidence to be provided.

During – or before – the first meeting, questions, or challenges may arise. That is the point when it may be vital to show the evidence that validates an entry in question. Subsequently, the mediator may need to update the schedule of assets and liabilities and re circulate it.

The most important outcome of this stage of the process is that you both gain confidence in the accuracy of all the figures provided. If either party seriously mistrusts information provided by the other party, mediation cannot proceed. Your mediator will help you decide when it would be best to exchange documentary evidence of your financial positions.

What happens if you are able to reach a settlement?

The Mediator will prepare 2 documents, namely an Open Financial Statement and a Memorandum of Understanding.

The Open Financial Statement (OFS) is not confidential.  It will set out the financial disclosure, basically it will confirm the situation regarding assets, pensions, liabilities and income and will clearly set out for both of you the financial situation that you are in.

1. Open Statement of Financial Information. 

This records all the details of your income, assets, pensions and debts that you will have shared in mediation and accepted as accurate.  These will have formed the basis of your discussions and any proposals you are making.  You will have been told about the importance of full disclosure and asked to sign to confirm that this disclosure has been completed.  This summary is not a legally privileged document and the details in it are regarded as open information which may be used in court.

The Open Statement of Financial Information will include a list of all the documents you have provided to each other and the mediator to support your financial disclosure. Your legal adviser will want to see a copy of these documents to reassure themselves of the accuracy of the figures.

2. Memorandum of Understanding. 

This is a summary of the proposals reached during mediation.  It is legally privileged and is intended to help you to obtain legal advice on your proposals.  It does not create or record a legally binding agreement between you.  To make the arrangements in the Memorandum of Understanding legally binding, a married couple will need a Court Order and an unmarried couple will need a Separation Agreement.  The Memorandum of Understanding can form the basis of a Court Order or a Separation Agreement.  Your solicitor/lawyer can assist you with this. A typical Memorandum of Understanding will include the following information :

• Background: setting out the date of your marriage, civil partnership, or relationship; details about you and your children; the date of your separation and whether you are seeking a divorce/ dissolution settlement or separation agreement.

• Your Aims: explaining what particular aims, for yourselves and your children, have influenced your proposals; what you have taken into account in arriving at your own definition of a balanced and fair settlement.

• Arrangements for the children: including details of the children’s living arrangements; the time they will be spending with each parent; your proposals concerning future decision making and consultation about the children; how the children will spend time with other important relatives.

• Maintenance: setting out the child and any other maintenance amounts agreed; the date and the method of payment; arrangements for periodic review; and for non-child maintenance, events that would trigger an exceptional review, i.e. cohabitation, remarriage, re-partnering, change in financial fortunes.  Where you have agreed a figure for child maintenance payments, the Memorandum will state that you have been informed that the Child Maintenance Service have the power to override this aspect of your agreement, were they to become involved.

• Your Incomes: details of your present gross and net incomes, e.g. earning and other sources of income, interest, benefits, dividends etc; your projected future incomes; your estimated future financial needs and outgoings; your proposals for achieving financial independence.

• Your Assets: details of the value of all your joint and individually owned assets e.g. your house, the surrender value of insurance policies, savings accounts, premium bonds, shares, businesses, companies, cars, valuables, inheritances, what you brought into your marriage or civil partnership and what has been accumulated during it.  All these and other assets must be disclosed.

• Pensions: details of the transfer values (known as cash equivalent values) of any present pension funds; the relative proportion of pension contributions made before and during your marriage or civil partnership; the value of any death-in-service or death-in-deferment benefits.

• Debts: the amount of any joint or individual debts, e.g. loans, credit cards, etc.

• Financial Plans on Separation: how, and in what proportions, your assets and debts are to be divided; the reasons that have influenced your decisions; whether you are seeking a “clean break” settlement or ongoing maintenance from/for your ex-partner; how the divisions are to be put in place, particularly with regard to any mortgage or pension provision.

• Wills and Nominations: your intentions concerning drawing up of wills in the event of divorce or dissolution; your plans regarding any nominations to be made to pensions schemes’ death-in-service or death-in-deferment provision.

• Implementation Plan: when you wish your agreement to be applied; what actions you propose regarding any joint bank or savings accounts, standing orders, direct debits etc.

• Future Disagreements: how you propose dealing with any future disagreements concerning, e.g. arrangements for the children, amount of child maintenance.  These might include the further use of mediation for instance.

• A Summary of your proposals, including affordability and the overall effect of the proposals.