Financial mediation explained. What to expect and how it works

Financial issues following separation can be complex and emotional. Family mediation offers a structured, supportive way to resolve those issues without the stress and cost of court proceedings.

Here, our Accredited Family Mediator, Liz Morris, explains how financial disputes are dealt with in mediation and what the process usually involves.

Financial Disclosure

The first step in mediating a financial settlement is identifying all assets and liabilities and agreeing their value.

Full and frank financial disclosure is a cornerstone of the mediation process. It provides the factual foundation for any future agreement and ensures both clients are making decisions with a clear understanding of their own financial position and that of their former partner.

Where values cannot be agreed, the disclosure process can help clarify the position. This may involve gathering further information, such as an independent market appraisal of a property or additional financial documentation.

Exploring settlement options

Once there is agreement about what forms part of the marital assets, the next stage is to explore the available options for settlement.

This involves discussing the advantages and disadvantages of different approaches from each client’s perspective, and from the perspective of any minor children. Options are carefully talked through and tested for practicality and fairness. Some will be discounted, while others may be identified for further consideration.

Clients will usually need to consider both the division of capital assets, such as property, savings, pensions and vehicles, and whether ongoing financial support is required. This may involve considering periodical payments or whether a clean break is achievable.

These issues are often closely linked and should be looked at together. Where ongoing support is proposed, consideration will be given to affordability, duration and the appropriate level of support.

Finer details

Once a broad agreement has been reached, there are often further practical points to address. These can include timing and implementation, household contents, insurance, capital gains tax, rights relating to the matrimonial home, and the handling of joint accounts.

Addressing these details helps ensure the agreement is workable and avoids future misunderstandings.

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:

• It is significantly less expensive than solicitor-led negotiation or court proceedings. While legal advice is still important, many clients save thousands of pounds in overall legal costs.
• The process is usually much quicker. Some clients are ready to submit a financial consent order within weeks, while most cases can be concluded within around six months, depending on the complexity and stage of divorce.
• Mediation provides a safe, neutral environment where different views can be discussed constructively. The focus is on collaboration rather than conflict.
• It can help preserve a civil relationship, which is particularly important where there are children and an ongoing co-parenting relationship is required.
• Sessions can take place in person or online, jointly or on a shuttle basis. This flexibility allows the process to be tailored to each family’s circumstances.

If you would like to find out whether family mediation could help in your situation, please call 01482 326666 or email emorris@hamers.com.