When parties are trying to resolve their finances upon divorce (or at the end of a civil partnership) they may need assistance from the court. Negotiations may have reached a stalemate or one party may be refusing to engage at all.
If so, a formal application to the court will be required and the court will then issue directions to the parties, guiding them through the financial disclosure process until either an agreement is reached by consent or, failing that, the court is required to make a final decision following an evidential hearing.
The court process is governed by the Matrimonial Causes Act 1973 (“MCA”) where the parties are married, or the Civil Partnership Act 2004 (“CPA”). Section 25 MCA (or Schedule 5, Part 5, CPA) lists eight separate factors that the court must take into account in each case. These are the parties’:
- income, earning capacity, property and other financial resources;
- financial needs, obligations and responsibilities;
- standard of living during the marriage/civil partnership;
- age, and duration of the marriage/civil partnership;
- physical or mental disabilities;
- conduct; and
- lost benefit values.
Some factors will be more relevant than others and the parties may not always agree on this. Where a dispute arises, the parties may be directed by the court to file written statements (often referred to as “section 25 statements”) in order to clarify their positions and expand upon the issues raised. These statements will generally be treated as the parties’ main evidence and so will be accepted instead of lengthy oral evidence at the final hearing. This can help to reduce the stress on the parties and reduce costs (if the hearing takes less time). They therefore carry great weight and so particular care is needed when drafting these important documents.
The statements themselves should be clear and concise, and must not contain any argument, express any personal opinion or use rhetoric. They should be limited to the parties’ evidence only and any documentation that the parties wish to rely upon to support their comments should be listed on a separate annex and attached to the back of the statement. The court will generally limit the number of pages allowed and will always set a deadline for the statements to be completed, and then for any responses to be made. These deadlines are very important. If the parties are late filing their statements they may be excluded as evidence without good reason for the delay and without the court’s further permission. Failing to meet a deadline will usually trigger a separate (emergency) application and fee, and it is important to bear in mind that there is no guarantee that permission will be given. The parties must sign their statements to confirm that the contents are true (to the best of their knowledge) and if they are subsequently found to have knowingly made any false statements then they may be held in contempt of court and penalised - possibly even committed to prison.
Each financial case will be looked at subjectively but the court’s final decision will be based on a thorough examination and a careful consideration of these eight factors. The judge at the final hearing will be required to explain the process adopted and to identify which factors have carried particular weight (and why) when notifying the parties’ of the court’s final decision. The importance of these statements cannot, therefore, be under estimated.