Divorce - Faster Settlements

Sorting out the financial provisions relating to the division of assets and to maintenance has always been a problem area in divorce proceedings.

One difficulty is that the court has always made its decisions in the absence of any knowledge as to whether an original offer to settle on a 'without prejudice basis' has been made and what the offer was. These offers are called 'Calderbank offers' and are not disclosed to the court. A Calderbank offer is often made fairly early in proceedings. One reason for this is that if the offer made is not exceeded by the amount of the settlement agreed in court, the person to whom the offer is made will carry the legal costs incurred after 28 days have elapsed from the date of the issue of the Calderbank offer. Falling short of a Calderbank offer by a few hundred pounds can lead to costs of thousands of pounds being incurred in some cases. This in turn, makes the whole process of the division of assets something of a gamble, with each side having to weigh up the likely risks and returns. This has led to Calderbank letters sometimes being used in a highly tactical way in negotiations. This has been identified by the Government as being a particular problem where the family assets are insufficient to finance two homes.

This type of approach to legal costs, whereby the winner's costs are paid by the loser, follows the general approach in English litigation. However, the wisdom of applying this type of approach in cases of family break up is very doubtful. However, under new proposals put forward by the Government, the court will take account of the legal costs incurred before the division of the 'matrimonial pot'.

This new approach should be helpful in cases where one party has access to considerable financial resources, so would not be unduly worried about costs, but where the other party does not and would thus see the costs of the litigation as significant. It is intended to create a more level playing field in matrimonial proceedings and also to give both sides an incentive to settle their arrangements without protracted negotiation.

A further proposal is that the judges hearing appeals in financial settlement cases should be experts in the financial aspects of divorce.

The consultation period on the proposals ended in December 2004 and the Law Society has published its response, generally welcoming the changes, but pointing out some defects.

 

The contents of this article 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.