Since the introduction of the 'new fault divorce era' via The Divorce, Dissolution and Separation Bill on April 6, 2022, applications for divorce have soared by 50%. There were almost 34,000 new divorce applications between April 2022 and June 2022; the highest quarterly figure recorded in over a decade.
Although the new law brought with it, at long last, some highly anticipated progressive changes to divorce in England and Wales, the new law is not without its challenges. The Law Society reports that between April 2022 and June 2022 just 39% of applicants sought legal representation, which was a decrease of 25% since the previous quarter. Further, of the total applications made, there were also 31% fewer applications for financial remedy. These statistics mark a clear link between the increase in people representing themselves without legal representation and the concerning decrease in applications for financial remedy.
What is a Financial Remedy Order?
A Financial Remedy Order is a Court Order available for couples seeking to resolve financial matters in their divorce.
When you marry, all of the assets you owned before the marriage become 'marital assets'. This means that they become your spouse's assets. Likewise, your spouse's assets will become yours. In order to separate these assets between you, you should ask a solicitor to apply to the court to make a Financial Remedy Order.
The court may order a lump sum payment, a pension sharing order, maintenance payments or a sale/transfer of property.
The order usually contains a clean break clause which ensures that neither you nor your ex-partner can make a claim against the other's assets in the future.
The first step in obtaining a Financial Remedy Order is providing the court with full and frank financial disclosure. This means that you and your partner should inform the court about what assets you have.
A solicitor can help you draft a Financial Remedy Order with a clean break clause, or if there are no assets, a Clean Break Consent Order.
When making any order, the court will consider a range of factors including the length of the marriage, whether there are children, yours and your partner's needs, incomes and earning capacity and your contributions to the marriage.
You can read more about matrimonial and non-matrimonial assets here
Why should you apply for a Financial Remedy Order?
Many couples believe that receiving a Final Order in their divorce proceedings marks the end of the process. However, it is crucial that you take the final step in your divorce by securing a Financial Order to sever the marriage financially.
Even if you and your ex-partner do not have any assets to divide, you must still apply for a Clean Break Consent Order to protect yourself against claims that could be made against your assets in the future.
Without a Financial Remedy Order in place containing a Clean Break Clause or a Clean Break Consent Order, you are exposed to the risk of your ex-partner making a claim against your assets even after the divorce. This could include assets that come into your possession after the divorce. It does not matter how long after the marriage you come into possession of the assets.
One infamous example of the potential consequences of not separating financially is the case of Nigel Page. Mr Page won £56 million in the lottery 10 years after he divorced his wife. His wife subsequently made a claim against his winnings and she was reportedly awarded £2 million.
The danger is that with fewer individuals seeking legal representation in divorce proceedings, fewer applications for financial remedy will be made. This leaves people exposed to potential financial claims against them in the future.
How can Duncan Lewis Solicitors help?
If you are already divorced and you have not applied for a Financial Order, it is not too late. You can apply for a Financial Order any time after your divorce.
Originally published 05 Arpil 2023.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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