Second bite of the wallet – Divorcees beware!

News - 17/07/2015

Court statistics show that there has been a sharp increase in enquiries from individuals who are already divorced but are now seeking further financial provision, or being hit with such a claim from their ex-spouse. In fact, the data collected shows the number of ex spouses seeking a further pay out has risen from 14,690 to 29,060 in the space of a year, so the number of claims has doubled.

It is thought that one of the reasons for this increase is that if financial arrangements are agreed, but not drawn up in to a document recognised by the court (a “Consent Order”), they are not enforceable and can therefore leave the divorcee open to further claims from their former spouse. This is  regardless of how many years ago they were granted a Decree Absolute, but provided they have not remarried.

This issue was highlighted in the much publicised case of Wyatt v Vince recently, where an ex-wife took advantage of the fact that there is no time limit for spouses to make a financial claims against one another. At the time of the divorce, Mr Vince was unable to make any significant financial contribution to the couple’s children. Fast forward to the late ‘90’s and Mr Vince’s green energy business had taken off, making him a multi-millionaire. The Court’s records had been mislaid, leaving some uncertainty over whether financial claims had been dealt with at the time of the divorce or not. Some 23 years after their marriage ended, his ex-wife brought financial claims against him, arising from their dim and distant marriage. The Supreme Court has said she is entitled to do so. Her claim will now be heard in the Family Division of the High Court. Ms Wyatt will now have a chance at securing an order that Mr Vince must pay her a lump sum, transfer property to her, share his pension with her and pay her maintenance.

This cautionary tale demonstrates the need to ‘tie up loose ends’ when a marriage is dissolved. If parties do not safeguard against future claims they might be brought when you least expect it. If Mr Vince had had a court order to rely on, his subsequent wealth since the marriage would have been protected and he would not now be at risk of financial orders being made against him.

This case has certainly raised public awareness of their right to go to court for financial orders even if many years have passed since they were divorced. Here at Morrisons Solicitors we are receiving an unprecedented number of enquiries about varying the terms of existing court orders and ex-spouses wishing to bring financial claims for the first time long after the marriages have ended.

Another potential reason for this spike in court applications is new legislation, which enables parties in financial difficulties to get their costs paid by their spouse as they go along. In 2013 the family courts were given the new power to “level the playing field”, so that both parties could afford to be properly represented. This is known as a Legal Services Order. These orders are suddenly very popular and we are seeing them more and more. They are not easy to come by: stringent criteria govern such applications. For example, it must be shown that they have no prospect of paying for legal services any other way – eg, loans from friends, family or commercial lenders, or the solicitor taking a charge over any assets recovered in the proceedings. This new provision was introduced to go some way to plug the large gap left by the removal of legal aid in the majority of financial order proceedings.

Indeed, in Wyatt v Vince, Ms Wyatt obtained a Legal Services Order, which demonstrates that this new law gives people the teeth to bring financial claims, including those people who might not otherwise have had the resources to even contemplate it.

The strengthening economy is also likely to have contributed to the higher volume of financial claims we are seeing. It is suggested that following the recession and housing crash (pre- 2013), the value of assets such as pension investments and business or property interests dropped, making them much less attractive to fight over. This, coupled with job losses and lower incomes generally, resulted in many people opting to make their own agreements in an effort to reduce costs. Since the recession, incomes and property/business values have increased in value, re-kindling old senses of injustice and giving people more to fight about.

Although it may seem more cost effective for the parties to draw up a ‘kitchen table agreement’ between themselves, if it is not formalised in the correct way, it could well come back to bite. Financial arrangements should be finalised by instructing lawyers to create a properly drafted consent order, terminating the right to bring financial claims in the future.

If you have any legal questions arising from a divorce or a financial claim following a divorce, please do not hesitate to contact Amanda Phillips of Morrisons Solicitors LLP, who will be happy to assist. [email protected]

Disclaimer:

Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position.

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