What Is Available Financial Resource In Divorce?
The starting point in every case must be to establish the financial positions of the parties (ie. what are the assets and liabilities of the parties). The court will then decide how the available resources should be allocated fairly and achieve a fair outcome.
In order for the court to determine how the available resources should be distributed to the parties fairly, considerations are given to statutory factors stated in Section 25 of the Matrimonial Causes Act 1973. These are also called “section 25 factors”.
The court will also consider some extra-statutory factors: needs, compensation and sharing (Miller v Miller; McFarlane v McFarlane 2006).
What are the Section 25 Factors?
The court will have to take into account of all the circumstances of a case, first consideration has to be given to welfare of any children under 18 years old, and the following factors: –
- Parties’ income and earning capacity, capital, property and financial resources
- Parties’ financial needs
- Parties’ standard of living during marriage
- Parties’ ages and length of marriage
- Any physical or mental disabilities
- Financial and domestic contributions each party made during the marriage
- Any conduct which will be unfair for the court to ignore.
Income and earning capacity, capital, property and financial resources
The court will take into account the parties’ income from all sources. Their respective actual earning will be the starting point.
The court will also consider parties’ potential earning.
The court will consider parties’ skills, age, and time out of work etc.
Earning Capacity maybe significant In determining who occupy the family matrimonial home.
Hearings
First Hearing/“First appointment” –
Depending on local court practice this will may be used as a first opportunity by the District Judge to address issues and encourage the parties to negotiate.
Procedural matters are dealt with and directions are given by the Judge about the future conduct of the case. The Judge will effectively endorse a timetable agreed by both parties leading up to the next hearing. Typical provision will include a timetable for parties (i) to exchange their questionnaires, which give parties a one-off chance to raise queries against each other’s Form E, (ii) provide certain disclosures; and (iii) a timetable for the next hearing.
In the first appointment, the only people present will be the Judge, the parties and their legal representatives.
Second Hearing/Financial Dispute Resolution Appointment –
The “FDR” is usually listed about 2 months after the First Appointment. By that time both parties should have available all the relevant facts and documents, if directions set out by the Judge in the first appointment are follow strictly. If not, the parties would get a chance to raise these issues with the Judge in the FDR.
The FDR will be led by the District Judge with a view to encouraging the parties to reach a settlement on a without prejudice basis.
Without Prejudice offers will usually have been made on both sides and these will be considered by the Judge and each of the legal representatives will explain their respective positions.
Each Judge has their own way of conducting the FDR. However, the Judge is likely to give a view as to which arguments are likely to find favour and may indicate what kind of order he or she would make if hearing the matter. The parties and their lawyers are then invited to leave the Judge’s room in order to negotiate.
If agreement is reached, the District Judge may make an order there and then but it is quite usual for the matter to be adjourned so the order can be drafted by your solicitor back at the office, approved by the other side and then sent to the Court for approval. If the matter is not agreed, the Judge will make any further directions required and set the case down for a final hearing.
Final Hearing – If the parties are still not in agreement, the matter is listed for a final hearing. This is a much longer hearing, again heard in private, although it may take place either in the Judge’s room or in a Court room.
A very straightforward case might be set down for half a day. A longer case will take up a whole day or even a week. The Judge who dealt with the FDR cannot deal with the final hearing because he/she will be aware of the without prejudice offers which cannot be disclosed to the trial Judge.
At the start of the case, the solicitor or barrister for the Applicant will make an opening speech explaining what the case is about.
Each of the parties and any witnesses then give evidence, according to the timetable set/agreed in the previous hearing or in a Pre-Trial review hearing for more complicated cases, and are cross-examined.
The usual timetable for a final hearing is as follows : the Applicant going first followed by his/her witnesses and the Respondent and his/her witnesses giving evidence second. The lawyers each make a closing speech.
The Judge will then give his or her Judgement and make whatever order he/she considers appropriate. After the order has been made there will be more arguments presented on the question of costs and a costs order may be made.
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