Final financial hearings on divorce – what to expect

Court proceedings dealing with the financial aspects of a divorce have a beginning, middle and an end. The ‘beginning’ a first appointment hearing (FDA), ‘middle’ a financial dispute resolution hearing (FDR) and the ‘end’ a final hearing. This format is set up to encourage parties to engage in proposals for settlement at every opportunity in the hope that an early resolution of the financial matters in issue can be reached to bring the proceedings to an end.

The FDR itself is a hearing where the sole focus is for the parties is to reach a settlement and avoid a final hearing altogether, and during this hearing the Judge gives an indication as to what the likely outcome of the case is which often unlocks the matters in issue. As a result, very few cases reach the ‘end’ of the court process and most cases settle in advance, or immediately before, a final hearing.

Where a final hearing is necessary, you will usually find that one or both parties have not meaningfully engaged in the process for settlement or one party is wedded to an outcome that is not realistic, such as retaining the family home when it is the main (or often only) asset, or not wishing to share their pension. Sometimes, however, even when every attempt has been made to reach an agreement there can still be an impasse on some or all the issues in dispute on which judicial input is needed for the parties to move forward.  A final hearing is therefore only required when a decision needs to be made by the court because the parties have been unable to reach one themselves.

When that happens and once a judge has heard from both parties at a final hearing, and sometimes even third-party experts (such as a pensions actuary or accountant), they will give a judgment. That judgment will determine how the assets are to be divided and what order should be made.

Preparing for a final hearing

Below, is a brief explanation of what needs to happen in preparation before a final hearing and what to expect at the hearing itself.

Preparation

Each party will have been required to take specific steps in the months leading up to the final hearing. These steps will likely include:

• Sharing updated financial disclosure/information to ensure that both parties, and the court, have the up-to-date financial information to allow workable orders to be made.
• Obtaining any further expert evidence required (for example instructing an estate agent to provide an updated property valuation, tax advice, updating pension report, company valuations).
• Filing a witness statement to address specific criteria. This is often referred to as a ‘section 25 statement’ (referring to section 25 of the Matrimonial Causes Act 1973 or Schedule 5, Part 5 of the Civil Partnership Act 2004) and which can be summarised as follows;
  • The capital and income resources available to the parties, either existing or reasonably foreseeable.
  • Details of the financial needs of the parties, including:
  • their standard of living;
  • their ages and the length of the marriage; and
  • any disabilities.
  • The court also considers the following additional factors:
  • the respective contributions of each party;
  • the conduct of each party (although only in exceptional cases); and
  • any benefit either party will lose as a result of the divorce (such as a spouse’s pension).

The section 25 statement will need to address each of the above criteria that is relevant in your case and is akin to a checklist against which the judge determining the outcome can check that all matters have been considered in arriving at a fair outcome.

• Setting out an open proposal for settlement which will be seen by the judge. Please note that open proposals for settlement are different from without prejudice proposals for settlement as the latter cannot be put before the court and are designed to allow parties to make concessions in the spirit of compromise without impacting how they are running their case.
• Filing timetable / witness template to ensure the hearing runs smoothly.
• Position statements are filed by the parties setting out in summary format each party’s case, updates, and the matters in issue together with your preliminary documents that should include an agreed chronology and asset schedule.
• Preparing a statement of legal costs incurred and together with estimate to the conclusion of the final hearing and the implementation of the order (Form H1).
• Filing a bundle at court with all the relevant papers for the judge to consider which must be filed in line with practice direction 27A of the Family Procedure Rules which sets out the rules for the content, format and page length of the bundle.

Some cases require a pre-trial review, which is a short procedural hearing, in advance of the final hearing. The purpose of this hearing is for the court to check whether earlier directions have been complied with and to check if there are any final steps that need to be directed in advance of the final hearing.

The final hearing

If settlement cannot be reached and the parties have taken the necessary steps in preparation, what can they expect at the final hearing itself?

Depending on the complexity and issues in dispute, a final hearing is given a time estimate in advance which could be between 1 day and several weeks depending on the matters in issue and number of witnesses. Generally speaking most final hearings can be dealt with within 1 to 3 days.

On the first day, the judge will often be allocated reading time. In an ideal world, the judge will have had time to review the papers and understand the issues before them before the hearing starts. However, with court resources and time so stretched, urgent cases can be listed during the judges’ allocated reading time. The lack of available judicial time can be a major disadvantage of the court system.

Despite all the costs in preparing for and attending the hearing having been incurred, it is possible the judge may encourage the parties to have a final attempt at reaching an agreement before the hearing begins.

The general view is that it is always better for parties to reach a consensus without the need for the court to intervene. Reaching agreement between the parties typically means they are both prepared to accept and live with the outcome, that being one that is in their own hands and not determined by a judge and this therefore mitigates the ‘litigation risk’ of an outcome being imposed.

Once the hearing begins, there will be some brief opening speeches by the parties’ legal representatives following which the parties will give their evidence. This evidence is called their ‘evidence in chief’, is guided by the party’s barrister and is often brief as it will predominantly be based on them confirming the content of evidence already before the court which will include their Forms E, replies to questionnaire and their section 25 statements.

Each party will then be ‘cross-examined’ by the other party’s barrister (or the other party directly if they are a litigant in person). Cross-examination is what features in many legal dramas and films, where the other party ‘put their case’ by questioning the witness to challenge their evidence. Being on the receiving end of a cross-examination can be nerve wracking and uncomfortable, however unlike the movies barristers are not given free rein to ask questions that are inappropriate, and a judge would intervene if matters raised are not relevant or are unprofessional or do not take the matter any further forward. There is rarely a winner or loser in family proceedings and in many cases, parties need to maintain a relationship to co-parent their children and so cross-examination should remain courteous but persuasive.  If experts are called as witnesses, the barristers will also ask them questions of their evidence.

A final hearing is ended by closing submissions from the barristers summing up the evidence and making the final arguments of their case.

The judge will then be given time to consider and write their judgment. In many cases, judgment will be given within a few hours and on the day of hearing closing submissions. However, in some cases, the judge needs more time. This can be frustrating as additional court time needs to be allocated for judgment to be given at a later date which could be weeks or months ahead. It is possible for a written judgment to be provided instead. Once judgment has been given, the parties’ barristers prepare a final court order reflecting the decision on how the assets should be split which is submitted to the judge for approval.

Important points to consider

Final hearings are the exception rather than the norm. They carry inherent litigation risk as the final outcome is taken out of the parties’ hands.

The court system is overwhelmed and there is not always sufficient time to deal with matters as fully as a party would expect. It is not unheard of for parties to prepare for a final hearing to find out the day before that a judge is unavailable, particularly since the pandemic when the court system is being stretched to breaking point. Court delays often result in there being several months between an FDR and a final hearing being listed.

Final hearings are also inherently expensive and stressful. The cost of a final hearing is often disproportionate to the matters in issue and a cost proportionate approach throughout can often highlight the cost benefit (if any) of proceeding to a final hearing. Nevertheless, they are sometimes necessary, particularly where one party has been unreasonable in their approach or unwilling to engage.

It is important to remain mindful that court is not the only way to reach a conclusion. Where an impasse has been reached and it is unlikely a solution-based method (such as mediation, collaborative law, inter solicitor negotiation, early neutral evaluation etc) will result in an agreed resolution, arbitration is worth considering as it can be arranged quickly and can often avoids the delay of the court process thereby saving costs.  There is more information about family law arbitration here.

Family Law Partners are committed to and have wide-ranging experience in the numerous methods of dispute resolution available when considering how the assets upon divorce should be distributed which helps us to assist the majority of our clients reaching settlement long before a final hearing.

Charlotte Plowman is an experienced family law specialist within our Horsham team. If you would like further information on the options available in resolving a dispute regarding the division of assets upon a divorce, please feel free to contact Charlotte or another member of our dedicated team for a confidential discussion about your personal circumstances. .