11 Ways to Agree a Financial Settlement on Divorce

Agreeing your divorce financial settlement can be difficult, stressful and ultimately very costly. A recent case highlighted in the national press in July 2021, showed a couple had racked up £390,000 in legal costs, by fighting each other through the family court and appeals. There are many other such examples where the litigation costs have got out of control.

In this blog, we go through the 11 methods you can use to help you reach a financial settlement for divorce. You will probably end up using one, or even a few of these methods. If you can agree which method(s) to try, even if you cannot agree on the actual financial settlement on divorce, then you will both save a lot of time, stress and money.

1) NEGOTIATE BETWEEN YOURSELVES

HOW IT WORKS:

Sit down together and agree what will happen. You can even write this into a non-binding agreement or ask a solicitor to draft a legally binding order for you. This is the step most people take first of all and is usually the best way to agree parenting arrangements where possible.

IDEAL WHEN:

• You have few assets, or issues to resolve.
• It is in a short marriage less than 5 years with no children.

LESS SUITABLE WHEN:

• You argue a lot, there is an imbalance of control in the relationship.

• You have complicated finances.

ADVANTAGES

+ Amicable

+ Zero cost

+ You both control the process and the outcome

DISADVANTAGES

− You may agree to something that is not in yours or the children’s best interests

− You may not discuss everything a court would like you to consider

− Trust issues with the other party

− You may later regret not seeking expert advice

− You may let emotions cloud your judgement

− You might not be able to discuss without arguing

− No legal advice

COST: FREE

2) ASK A FAMILY MEMBER OR FRIEND TO FACILITATE COMMUNICATION

HOW IT WORKS:

You ask a trusted and/or experienced friend or family member to help you communicate to enable discussions to take place. This works well for young parents of children for parenting arrangements but can also work for a financial settlement.

IDEAL WHEN:

• You have a neutral parent-type figure or friend with experience in family law.

LESS SUITABLE WHEN:

• You argue a lot, you have complicated finances
• the neutral friend or family member is not trained or experienced.

ADVANTAGES

+ Amicable

+ Zero cost

+ You both control the process and the outcome

DISADVANTAGES

− No legal advice

− The friend or relative is probably not a qualified mediator

− Can affect your future relationship with your friend or relative

− Difficult for them to remain impartial

− They may be too close to the situation

COST: FREE

3) FACILITATION

HOW IT WORKS:

You make a full financial disclosure with an overview of your agreement that you have reached in principal and arrange a 90-minute meeting together with the facilitator. They sense check your agreement and make sure you have considered everything you need to for court. They agree the divorce process with you both and then produce a memo of understanding on what you have agreed. A solicitor is then allocated to you both to manage the divorce and/or financial consent order or separation agreement.

IDEAL WHEN:

• You have the basis of an agreement between you and need it checked by an expert.

• You can discuss matters together amicably and carry out much of the discussions outside of the facilitation session.

LESS SUITABLE WHEN:

• You are far apart in your views and beliefs on the agreement.
• You want a solicitor to fight your corner.

ADVANTAGES

+ Amicable

+ Quick – divorce settlement can be agreed in 90-minutes

+ Deal with one party for your divorce

+ Independent verification of your agreement

+ A legally binding clean break consent order can be achieved

+ Full disclosure carried out with an independent third party

+ Solicitor managed divorce can be included

+ Your agreement is less likely to be rejected by the court

DISADVANTAGES

− No specific legal advice included

− You need to be in agreement or very close to reaching an agreement

− Negotiation is a non-regulated activity

COST

£350 per person, then £349 per person balance paid for a consent order package.

4) FAMILY MEDIATION

HOW IT WORKS:

The family mediator will meet with you individually before seeing you together. This initial meeting is called a MIAM.  Family mediation follows a tried and tested process to help communication to enable you to reach a decision together with their help. Any agreement is recorded into a Memo of Understanding and can then be made legally binding.

IDEAL WHEN:

• Communication is difficult between you and you need a neutral third party to assist communication.

LESS SUITABLE WHEN:

• There has been domestic abuse or you feel intimidated

  

• You want a solicitor to fight your corner for you.

ADVANTAGES

+ Cheaper option than other methods listed below

+ Helps you to focus on the key issues

+ Helps to maintain ongoing relationship

+ Quicker to set up mediation

+ Family mediators have excellent training and knowledge of the principals of family law

+ Mediator can suggest options you might not have considered

+ Full financial disclosure is undertaken

+ Children can have their say in the process if you both agree

+ Legal requirement to attend mediation as step to going to court in most cases

+ Regulated process that works

+ 90% of our clients reach agreement through mediation

+ Can easily be held through online mediation

DISADVANTAGES

− No specific legal advice included (legal advice can be obtained at a fixed fee)

− The mediator cannot give advice or tell you what to do (but can give options)

− Works best when you are both in the same room, or online though you can be in separate rooms / online screen with shuttle mediation

− Agreements made are not legally binding but can be made so.

COST:

Mediation costs from £130 per person per hour. Joint meetings usually last 90 minutes. Once an agreement is reached you can save money through one of our fixed-fee legal packages.

5) SHUTTLE MEDIATION

HOW IT WORKS:

Each party meets with the mediator on their own. A plan is then put in place for shuttle mediation, where each party has separate arrival and departure times and you remain in separate rooms throughout. Sessions usually last 2-hours with the mediator allocating 15 minutes slots per client. We believe Shuttle mediation is better suited when held online.

IDEAL WHEN:

• You feel intimidated by the other party or would not be able to be in the same room as them.

• Suitable where domestic abuse or intimidation has taken place.

LESS SUITABLE WHEN:

• You want a court to tell you both what is going to happen.

ADVANTAGES

+ You do not have to be in the same room

+ Separate arrival and departure times or held onlin

+ Cheaper than court or paying for solicitors

+ You can have someone in the room to support you

If agreement is reached you gain access to our fixed fee legal services

+ Works very well online

DISADVANTAGES

− You may not reach an agreement

− Person to support you cannot negotiate on your behalf or be a solicitor

− Mediation process takes longer

− You need to pay for hire of additional room if not held online

COST

From £130 per person per hour. Meetings usually last 2 hours. Once agreement is reached you can save money through one of our a fixed fee legal package.

6) BARRISTER REVIEW

HOW IT WORKS:

For a barrister review you both do a full financial disclosure before meeting together with your divorce expert or family mediator. The issues to be resolved will be discussed and a file sent to a family law barrister. They will write a report on their recommendations based on their experience of the law and courts. You then choose to meet with the divorce expert again to discuss the recommendations and agree the issues – or just agree them outright.

IDEAL WHEN:

• You want a barrister and expert in family law to give a neutral recommendation.

• You are unable to agree on what to do – but do agree that you don’t want to spend thousands on legal fees.

LESS SUITABLE WHEN:

• Your positions have become entrenched and you are less likely to accept the barrister review.

ADVANTAGES

+ Expert opinion on you case

+ Full disclosure undertaken by neutral third party

+ You let a third party decide, removing the need for arguments

+ You can discuss the recommendations with a divorce expert to finalise your agreement

+ A legally binding consent order can be added

+ Fixed fee helps control costs

DISADVANTAGES

− You may not agree with the barrister’s opinion

− Individual legal advice not included

− Barrister reviews take up to 6 weeks

COST:

£60 per person for your initial meeting.

£499 per person for the barrister review

7) COLLABORATIVE MEDIATION

HOW IT WORKS:

Each party meets with the mediator on their own and they then arrange a meeting with both parties and their respective solicitors in attendance. The mediator facilitates

communication between both sides in order to try and help them reach an agreement.

IDEAL WHEN:

• You do not feel able to put your side across in mediation and would like someone to negotiate on your behalf.

LESS SUITABLE WHEN:

• You do not have the funds to pay for your solicitor’s time as well as that ofthe mediator.

ADVANTAGES

+ Specific legal advice received

+ Independent scrutiny of the financial disclosure

+ A solicitor to negotiate directly round the table

+ Less expensive than other alternatives on this list

DISADVANTAGES

− You may not reach an agreement

− You can end up paying for your solicitors to simply argue points with each other

− Any agreement reached is not legally binding

− You still need to pay for a divorce and consent order

− Logistics of getting everyone together is difficult

− Not popular in the UK at present

COST:

£2,000 to £5,000 per person depending on amount of work before the mediation and length of mediation.

8) HYBRID MEDIATION

HOW IT WORKS:

Each party meets in their own ‘caucus‘ which may include a solicitor, accountant and any other relevant professional. The mediator goes between each group to help them negotiate an agreement, which is then drafted. It is based on commercial mediation methodology.

IDEAL WHEN:

• You have a complicated set of circumstances and need expert input on the implications of your agreement.
• You want to settle matters quickly. Hybrid is usually completed in one half-day or full-day session

LESS SUITABLE WHEN:

• You do not have the funds to pay for several professionals time and a mediator for a whole day.

ADVANTAGES

+ Specific legal advice on hand

+ Financial and other experts have an input to your case

+ Can be resolved in one day

+ Professionals on your case sepal directly to each other in same room

+ Agreement can be drafted on the same day

DISADVANTAGES

− You may not reach an agreement, but still have to pay the costs

− Not yet recognised as a MIAM for a court hearing

− A relatively new method of dispute resolution in the UK

− More expensive than family mediation

COST:

£2,000 to £4,000 per person depending on number of experts involved

9) INSTRUCT A SOLICITOR TO NEGOTIATE ON YOUR BEHALF

HOW IT WORKS:

Either or both of you instruct a solicitor to write to the other party requesting their financial information and then stating what they would like as part of the divorce settlement or separation. If agreement is not reached, they will usually file an application for a financial consent order or child arrangement order (or both) with the court.

IDEAL WHEN:

• You have been a victim of domestic abuse or need someone to fight your corner for you.

LESS SUITABLE WHEN:

• You do not have much money to instruct the solicitor.

• You wish to remain amicable and control costs.

ADVANTAGES

+ Specific legal advice given

+ Financial disclosure made and scrutinise

+ You will normally see your solicitor face to face initially

+ You have someone to fight your corner

DISADVANTAGES

− Solicitor advice may set positions and unreasonable expectations

− This method of divorce is geared towards litigation and going to court

− Can get very costly

− Solicitor should recommend you try family mediation first

− Can be a lengthy process

− Most solicitors charge between £200 and £450 per hour plus VAT

− The other party does not have to engage with your solicitor

COST:

A contested divorce such as this will cost between £2,000 and £10,000 per person but costs

can increase significantly.

10) ARBITRATION

HOW IT WORKS:

Having usually instructed solicitors and undertaken negotiations between them that have failed, or attempted family mediation, both sides agree to go to an independent

adjudicator, whose decision is binding.

IDEAL WHEN:

• Both parties want to avoid going to court and have exhausted negotiations through their own solicitors or mediator.

LESS SUITABLE WHEN:

• There are complex issues or matters of law to discuss

  

• You want your ‘day in court’.
• The other party is not being compliant in the process or not communicating in anyway.

ADVANTAGES

+ Quicker than going to court and generally less expensive

+ The decision made by the adjudicator is binding on both parties

+ Becoming more popular in the UK

+ Specific issues can be judged on – so you can agree the majority of issues and just use the arbitrator for the issues

you cannot agree on

DISADVANTAGES

− You may not agree with the decision made

− You will have to pay for the arbitrator’s time and the room hire

− You should strongly consider representation by a solicitor or barrister to put your case across for you

COST:

Cost between £3,000 and £15,000 per person depending on how much has been spent already on your solicitors and/or mediator and how long the

adjudicator needs to adjudicate on your

11) FILE AN APPLICATION TO COURT

HOW IT WORKS:

For parenting matters you file an application for a child arrangement order and for financial matters you file a financial order application.

Usually you need a MIAM (Mediation Information Assessment Meeting first) Whilst you can represent yourself and reduce the legal fees we simply do not

recommend this due to the many horror stories that we have heard.

The court process will normally involve several hearings but interim orders can be made in the meantime.

IDEAL WHEN:

• You simply cannot agree and want a court to make a final and binding decision.

• The other party is not responding or being completely unreasonable in their demands.

• A child is at risk.
• All other avenues have been tried.

LESS SUITABLE WHEN:

• You have taken legal advice and disagree with it, believing the judge will take your side.

• You have not exhausted all other attempts at resolving the issues.

ADVANTAGES

+ You will have a legally binding decision at the end of the court process

+ CAFCASS can interview your children to get their view for parenting matters.

+ Drug and alcohol testing can be given to both parties if an issue for child arrangements

+ A court can make a decision in the other party’s absence

+ A court can issue a summons to the other party to appear at court

DISADVANTAGES

− You should always be represented at court but this comes at a cost

− You must make separate applications for parenting and financial matters – they are not dealt with together

− It takes on average 11.5 months to resolve a financial settlement on divorce through a court and three hearings.

− It is very expensive

− You may not agree with the decision made by the judge

− Couples tend to return to court each time they want a change to the agreement or amendment (e.g. spousal maintenance)

− Court deals with matters of law not emotions

− Process can destroy any ongoing relationship

COST:

£20,000 per party for finances but costs can increase considerably.

12 TOP TIPS TO REACH A FINANCIAL SETTLEMENT ON DIVORCE

1. Try to remove the emotion from the situation. The court will not look to punish or reward behaviour during a marriage. Just focus on what you both realistically need moving forwards.
2. Stay calm. You are both in this together and both trying to get an agreement
3. Try to understand the other party’s viewpoint – even if you disagree with it.
4. Prioritise the children in each and every decision made. A court is highly unlikely to order that the children do not see one of their parents. However difficult, you both need to work together to raise the children. The court will always prioritise their needs moving forwards.
5. Keep negotiations to a specified time if doing so between yourselves or during the mediation, negotiation or solicitor meetings.
6. Try to avoid text messages, emails and ad hoc discussions about the divorce financial settlement. Certainly avoid discussing anything in front of the children.
7. Disclose everything. As soon as you try to hide a fund or the true value of an item, you misplace any trust and will find yourself with costly legal bills. You may also be committing fraud.
8. Don’t let guilt or stress play a part in you agreeing to something that you do not consider fair. Use a mediator, negotiator or solicitor to assist you if this is the case.
9. View the situation as a problem that needs solving. How do we fund two lives moving forwards? What changes do we need to make to do that and how can we put them into action?
10. Don’t just lose control and say, “see you in court”. Remember that this course of action will take on average 11.5 months and £20,000 to get a decision just on finances…and a decision that you may not even agree with.
11. Remove from the discussions the roles that you played in the marriage. If one of you was the breadwinner and the other a home maker, the court would apply equal value to both of those roles. In many cases these roles will combine more when you separate.
12. Remember: Disagreement is normal on reaching a financial settlement for divorce – but you can both agree to resolve those disagreements amicably and keep thousands of pounds within the family pot.

Mediate UK can help with reaching agreements on a divorce financial settlement and parenting arrangements as part of your divorce or separation – we are the top-rated family mediation service in England & Wales. 

Find out why. Call us today on 0330 999 0959 or email admin@mediateuk.co.uk to find out more.