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Mediation in big money divorces

After 18 years of marriage I have separated from my partner following an increasingly acrimonious relationship. My solicitor has suggested that we agree the terms of our divorce through mediation, rather than through the courts. I am concerned that I will be bullied and will leave our marriage with little or nothing to show.

Answer

Why mediation?

It is now almost a year since the introduction in divorce proceedings of compulsory mediation. Parties have each to attend an Information and Assessment Meeting prior to the issue of a financial application in divorce proceedings. The reasoning behind this is the notion that outcomes negotiated by the parties in mediation would save costs and release the overburdened court system.

The format has been very successful regarding children matters where, typically, the parties feel confident of discussing the issues in the presence of an independent third party and want to agree, if they can, for the sake of the children.

Will I be bullied?

Different forces are involved in financial mediation. For example, where the financial understanding of one party is greater than the other, the less able party can have concerns about losing control of their side of the negotiation.

This can be remedied where each party has their own solicitor and the mediator is obliged to refer back to the parties' solicitors when appropriate. The solicitors will discuss issues with their clients and ensure that they are fully confident to proceed should they both wish to do so.

The mediator will also be a qualified solicitor with appropriate financial acumen who will be aware if the discussions are moving away from an acceptable outcome for either party. Finally, prior to approving the court order, the Judge will check every Consent order achieved to ensure that the settlement is within the appropriate bracket for both parties.

What are the advantages?

  • Costs. Legal costs are now extremely burdensome and can sometimes be disproportionate to values of the assets under consideration.
  • Time. In the London courts cases can often take over 12 months from start to finish, sometimes over 24 months. Legal costs meanwhile are increasing throughout. Even in less busy courts, cases will routinely take six to nine months or more.
  • Customised Solutions. Because the parties communicate with each other via the mediator/solicitors they can make suggestions which suit them but would not be found in a court order when the courts are limited to three possible orders: transfer of property, lump sum payments, and maintenance. Mediation can provide a more flexible approach.

Can mediation work in big money cases?

After a period of changes in the interpretation of the law, and a line of decisions by the superior courts, a set of principles have evolved in the courts that now provide quite rigid parameters and the ability to predict outcomes in high value cases which has not been attained in the last decade.

Parties in divorce cases can now often expect their individual solicitors to give them a good idea as to what outcome can be achieved in a particular case at an early stage and solicitors can readily explain the relatively simple concept that courts consistently now apply. Ironically, this is particularly so of the higher wealth cases.

The most important change being that any settlement is now limited to wealth accrued during the marriage ("family acquest"), in most cases with a starting point of a 50/50 split. Only if the financially weaker spouse's "needs" cannot be met in that way does the court go on to make an award which bites into inherited or pre-acquired wealth.

These cases therefore very often proceed on the basis of "needs generously met" and the court seeks to provide a lifestyle which is as near to that of the family during the marriage as to practical and to compensate either for any loss as a result of the marriage if appropriate, for example in the case of a wife who has given up an established career and lost her high-earning power.

Issues of need are routinely dealt with via competing schedules of what each party believes is fair. Just as in children cases, the subject matter of this discourse is well within each party's grasp and mediation represents an ideal forum. The parties retain the protection of their own solicitor but have the flexibility of negotiating directly with the assistance of the mediator. Who will also be an experienced solicitor practicing in this field.

This article was first published Spear's Wealth 19 March 2012.

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