Family Procedure Rules 2010: Financial Orders
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.
Containing costs
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.
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14 Comments
ObiterJ on April 1, 2011 at 12:20 pm
I note that the Norgrove Review is planning to look at the whole question of ancillary relief (which I know as mich about as microbiology)!! Will be worth watching what they get up to.
I am sure you are right about the Statements of truth. It would seem more logical that the lawyer gives the relevant advice and the client signs the statement of truth and, at the same time, acknowledges the fact that he has signed it having received advice. “There may be trouble ahead …”
http://www.youtube.com/watch?v=TnfKmNRfLYU
Marilyn Stowe on April 1, 2011 at 1:16 pm
Absolutely FABULOUS!
Made my day and cant stop smiling
Thanks so much.
Loes on April 15, 2011 at 4:29 pm
Marilyn,
Considering to apply for a variation of periodical payments order. Here are the circumstances:
Financial Order / Decree Absolute November 2009. Because I (wife) + 8 yr old child live abroad judge had to deal with child maintenance. This was fixed at £ 250, nominal maintenance for me fixed at £ 1. Ex-husband is company director and had “adjusted” his salary to suit circumstances. Judge commented in judgement that he did not believe salary disclosed by husband was credible.
By way of division of assets I was awarded monetary claim on company + shares that I held in the company. Ex-h has since done a “pre-pack” Phoenix so I have lost shares and claim and he is all the better for it. In short: division of assets largely frustrated.
With the exception of a short interim-contract I have not been able to find work. We are living for free in sub standard accomodation (think squatting). Judge admitted it wasn’t suitable for us. Can’t afford anything else. Except for equivalent of child benefit I’m not entitled to any social security hand outs.
I have good reasons to believe ex-h’s financial position has improved. Not sure whether that is because of salary increase (he can basically decide his own), dividends or other emoluments.
No savings or family silver left to sell. We really can’t go on living like this.
- Under the new rules, should I surprise my ex-h with a Form A or is there an obligation to reach a settlement? Bear in mind there has been nothing amicable about this settlement, and he would just use any chance to negotiate as a way of protracting and frustrating my aim.
- Is is the Form A (Financial Order) or the Form A1 (Financial Remedy) that I should use.
- Given that I live abroad, I do not have to go through mediation, do I? Which box should I tick on the Form FM1? The situation hasn’t been foreseen?
- Do I need to serve these at Court that dealth with initial Ancillary Relief or can I choose another more convenient for me to travel to (and cheaper because I could stay with friends instead of hotel). Or would it be a disadvantage having a new Court look at the case.
- No legal aid available to me so I will have to represent myself again. Ex-h will probably beusing expensive lawyers and flouting disclosure rules as he did last time. Any suggestions as to how I could improve my chances of success would be welcome. Eg does is matter what source of his income or funds is? If he uses company car, does that count towards his income? Should Judge roughly apply 15% of income as per CSA rules?
- Lastly, should Judge bear in mind that I am at disadvantage compared to someone living in UK who could use CSA. Can’t go to Court every year to ask for variation – Judge would get annoyed and I wouldn’t be able to cope emotionally either. Can I expect judge to build in upwards margin to allow for this? Can I ask Judge to force ex-h to disclose salary information, bank statements etc on a regular basis?
Thanks for your comments and your great blog!
Lukey on April 16, 2011 at 12:18 am
“With the exception of a short interim-contract I have not been able to find work. We are living for free in sub standard accomodation (think squatting). Judge admitted it wasn’t suitable for us. Can’t afford anything else. Except for equivalent of child benefit I’m not entitled to any social security hand outs.”
===========================================
I’ve got an idea Loes, why don’t you STOP living abroad, then your living conditions will be better, you can use the CSA to harass your ex-husband and the kid can see his father.
Just a thought…
Loes on April 17, 2011 at 11:53 pm
You are judging without knowing the facts Lukey.
It wasn’t exactly a free choice to leave the UK. It happens to be a very expensive place to live without an income and any support systems to fall back on. I very much wish we could afford to come back but we are trapped.
Sadly, children are not top of every father’s list when they start divorce procedures. Some fathers have other priorities Lukey. And sadly, not all fathers have a sense of financial responsibility towards their children either.
Had any of that crossed your mind when you shot off your response?
Liz Bell on April 18, 2011 at 5:21 pm
Loes: Thank you for your comments. Mrs Stowe has asked me to reply. I would suggest that you do a search at Companies House first, to have a look at the accounts for the business your former husband is involved with to see how the company is doing. If you are seeking a variation to the payments you currently receive it might be an idea to try and open the lines of communication by writing to him first setting out your budget requirements and the amount you require from him. If he then does not respond favourably and it becomes necessary for you to issue proceedings then depending on the outcome you may be able to recover some of your costs from him.
If you do have to issue proceedings then the form A is the correct form to use and the fee is £240. In terms of which Court to use in the first instance the variation proceedings should be issued in the Court where the first set of proceedings took place. However, you may be able to make an application to that Court for the proceedings to be transferred to a Court more convenient for you and you would have to set out your reasons for the transfer and there is no guarantee you would be successful, but it is certainly worth a try! For the FM1 form because you live abroad you could complete part 4 of that form and say that due to you being abroad, you have not attended a mediation assessment meeting because it is simply not practical to do so.
Kind regards
Liz Bell
(Solicitor, Stowe Family Law)
Loes on April 22, 2011 at 10:12 am
Liz,
Many thanks for your reply. The approach you suggest makes sense. Even though I don’t expect ex-h to voluntarily increase maintenance, by following your advice I will have shown my good intent.
A few more questions for you.
1. Does it make sense to tick the box “order for maintenance pending suit / outcome of proceedings”. Are there any strategic, procedural or financial disadvantages in ticking this box?
2. Ex-h financial situation will only be clear to me after his disclosure (if I’m lucky…). How about ticking the box “lump sum order”? Does that mean there will then be a “clean break” as far as my maintenance is concerned? Not sure if I want that as my financial future is far from certain. Can I just drop that part of the application if it turns out to be irrealistic, inappropriate or not in my interest at this stage?
Many thanks again,
3. Will the judge bear in mind that – as the company director – my ex-h can effectively set his own salary / remuneration? Is what he could earn in the market (if he chose to) at all relevant in this respect?
Lukey on May 4, 2011 at 8:54 pm
“- Lastly, should Judge bear in mind that I am at disadvantage compared to someone living in UK who could use CSA.”
You the said the above in your post. You also said:
“No savings or family silver left to sell. We really can’t go on living like this.”
and this:
“With the exception of a short interim-contract I have not been able to find work. We are living for free in sub standard accomodation (think squatting). ”
so I don’t see at all how you are trapped abroad at all.
It is better for your child to and have a relationship with their father and you being in the UK would definitely help that wouldn’t it ? If you are going to try and take him for more money and your life abroad is so terrible then it seems a reasonable thing to do for all parties.
June on May 19, 2011 at 8:15 pm
I have today receivied a letter from my ex husbands solicitor.
He is asking in this letter for confirmation that I have served a copy of my application for Ancillary Relief with my ex husbands’ pension provider.
My questions are:
Do I have to do this or does my ex?
Does it need to be done before my first Appointment at court?, which is on next Monday.
Regards
June
James Thornton on May 20, 2011 at 1:48 pm
June,
You are obliged to serve a copy of Form A on the person responsible for the pension arrangement upon making the application under Family Proceedure Rules 2010 r9.31, if you are seeking a pension sharing order. You should therefore send immediately to your ex husbands pension trustees/scheme administrator.
Regards,
James Thornton
Stowe Family Law
Bonny on September 18, 2011 at 4:28 pm
Dear Marilyn,
I have been trawling the internet looking for help, your blog is very informative.
My ex has applied to court for a downward variation of his maintenance order paid to me. He initially suggested a drop from £550 a month to just £50, an offer I declined. He proceeded to put in form A
A court timetable was set for form E to be exchanged for Sept, first appointment in October,
Now he is asking for my consent for an adjournment until next march as the annuity he claimed he was relying on to pay my maintenance had resumed to him, in March he would reassess the situation.
I wrote back that I would agree to this with the terms he would write to me prior to restoring proceedings and that if no application is made to restore by April the court would then dismiss the application.
He has now replied through his solicitors saying that in order to adjourn a new timetable has to be drafted to the court requiring my signature. Is this the case? If I do not reply with the signed form within 7 days they would have to make an On Notice rather than a Consent Application to the court.
My ex is a retired solicitor himself so I am at a disadvantage in my basic knowledge.Can you explain this terminology to me? (On notice)
Also your general thoughts? I am acting in person with a bit of advice from friends (legal)
Thanks in advance
Marilyn Stowe on September 18, 2011 at 9:17 pm
Dear Bonny
Thank you for your comments. I get requests like this very frequently and just can’t understand why.
What is it that makes some people think they can handle an application that would leave them on the face of it penniless:- without any serious legal advice?
What on earth motivates them? Would they pull out their own teeth? Operate on themselves surgically? Why do they think they can run a serious legal case without any real advice with a real chance of penury if it goes wrong?
You do need specialist advice on what you say.
I think an application has been issued which your ex is now clearly worried about. Does he think a court might capitalise your maintenance? Award you more? Not do anything and cost him a lot of money for nothing? Have you considered any of these options? Have you cross applied?
I’m not a mind reader and Ive seen no papers myself so I just don’t know.
What I do know is that I would be interested to see his Form E before agreeing to anything to check out his position.
And so:- please, go and see a specialist family lawyer. At least for initial advice – but please go.
Linda Crichton on January 17, 2012 at 2:06 pm
In a schedule 1 application for housing costs and school fees should both parties now complete a Form E. In my case I have completed a Form E but the respondent has only completed Form E1W as they feel Form E is only for parties who were married. Form E1W is nowhere as extensive and I do not feel we have a true and frank disclosure.
Gee on March 14, 2012 at 12:48 pm
> 3rd Application under Children Act in November 2010 due to father’s regular breaches of Orders requiring him to make periodic payments for his child.
> M + F never married.
> F had earned and spent ( failed to provide adequate disclosure so dont know on what) huge sums of money in preceding 4 years or so, and accumulated huge debts
> 5 weeks before substantive hearing F transferred all his assets to his wife ( 1/2 share in matrimonial home, this for no value). F’s solicitors had confirmed in writing that this was “to avoid F’s creditors”( M being 1 of them)
> M forced to accept reduced periodic payments in November 2010(due to F having accumulated large debts), which F has since failed to pay yet again, and substantial arrears have accrued
> M taking enforcement proceedings in County Court, which have now been consolidated with Family Case. M acting in person as cant afford legal representation
> does District Judge have power under FPR to Order transfer of 1/2 share in matrimonial home back from F’s wife to F as a “reviewable disposition” and/or would Judge have any inherent jurisdiction to do so and then Order a charge against it/force sale due to F’s repeated breaches of Court Orders and financial irresponsibility towards his child????
Any useful suggestions/caselaw??