Mediating financial issues: Everything you need to know

Resolving financial issues in family mediation can be challenging and emotional for all parties involved.

Having an accredited family mediator to help resolve your case is the best solution for everyone. It is considerably less expensive than taking the matter to court, and means things can be resolved in a sensitive, professional way.

Here, our Accredited Family Mediator Liz Morris discusses the steps taken to resolve a financial dispute through mediation.

Financial Disclosure

The first step in mediating a financial settlement is to identify the assets (and any liabilities) and reach an agreement on their value.

The exchange of full and frank financial disclosure is a key part of the mediation process as it establishes the factual basis for any future agreement and ensures that both clients are entering into an agreement with their eyes open, fully aware of their own financial situation and that of their spouse.

Where the value of assets cannot be agreed, financial disclosure can assist in addressing these disagreements and it may be that additional information needs to be gathered – for example, market appraisals of a property.

Identifying the options for settlement

Once clients have agreed what is in the “marital pot”, the next step is to look at the different options for settlement and the advantages and disadvantages of each one – from each client’s perspective and also from the perspective of any minor children of the family.

By talking through the different options and “reality testing” them to see if they are workable, practical solutions, options can either be discarded or highlighted as favourites for further consideration. The aim of a financial settlement is to meet the needs of the clients and any minor children.

Clients will need to consider both the division of capital assets (such as property, savings, pensions, vehicles etc) and also whether the financially weaker spouse needs some form of ongoing financial support from the other (periodical payments vs a clean break).

These issues can often be interlinked and should not be considered in isolation from each other. If a need for periodical payments is agreed, consideration should then be given to whether the financially stronger spouse can afford to provide ongoing support and if so, how long this should last and at what level.

Finer details

Once a broad plan of action has been agreed, there will be further details to consider and/or discuss. For example, issues of timing and implementation; home contents, insurance, capital gains tax, matrimonial home rights issues; joint accounts etc.

Accessing Independent Legal Advice

It is always advisable to obtain independent legal advice on a proposed financial settlement before it becomes legal binding. The solicitor can then draw up the consent order that is submitted to the court.

If one of you is eligible for legal aid and you reach an agreement in mediation, that person can access the Help in Support of Mediation scheme to have the consent order drawn up free of charge. This funding is not available for agreements that are reached outside of family mediation.

Benefits of going to family mediation to resolve financial issues

• Family Mediation is considerably less expensive than other forms of dispute resolution (such as solicitor’s negotiation or court). Whilst legal advice should still be obtained on a proposed settlement, the costs involved in reaching the agreement are much lower in family mediation and clients can save thousands of pounds in legal fees.
• Family mediation is generally a lot faster than other forms of dispute resolution. From the date of the initial enquiry, some clients can be ready to submit a financial consent order to the court within a matter of weeks. Others may take longer, particularly if there is additional evidence to gather, but most cases can be finalised in 6 months (assuming they have reached the Conditional Order stage in their divorce).
• Family mediation provides an environment whereby differing views can be aired in a safe space where the emphasis is on collaboration to find a mutually beneficial solution, rather than pitting clients against each other. The process is designed to be as painless as possible and to reduce conflict and acrimony.
• Family mediation can help to maintain a civil relationship between clients – this is particularly important where there are children of the family and clients need to have a workable co-parenting relationship with each other once the financial issues have been resolved.
• Meetings can be held in person, or online, with everyone together or on a “shuttle” basis where clients do not see or speak directly to each other. The process is very flexible and can be adapted to meet the needs of the clients.