​​​​The Importance of a Court Order in Family Law - What can go wrong?

​​​​The Importance of a Court Order in Family Law - What can go wrong?

The importance of formalising a financial settlement by way of a Court Order is an aspect often overlooked by divorcing couples as a result of the emotional upheaval they are experiencing. Many divorcing couples are still under the misconception that obtaining a divorce alone will bring an end to the financial obligations owed to one another. This is not the case and unfortunately it is becoming more and more common for individuals to find this out the hard way and in some cases many years after the divorce has taken place. The case of Mr and Mrs Briers is yet another example which has received widespread media coverage due to devastating financial impact that failing to obtain a Court Order has caused.

As reported in the Telegraph, the wife of the self-made fashion millionaire, Glen Briers, recently won a £2.7 million divorce settlement. What made this case particularly hard-hitting was the fact that Nicola Briers brought the claim for financial remedy ten years after their divorce had taken place.

When the couple divorced in 2005, Mr Briers gave to his wife, £150,000 to pay off the mortgage and let her keep their £700,000 family home. Mr Briers walked away with the fashion business. At the time the business was turning over about £1 million a year. Mr Briers says that he believed there to have been a verbal clean break agreement at the time the settlement was agreed. The couple failed to formalise the financial terms of their separation through a Court Order.

Since the divorce took place the business has grown into a major fashion chain, incorporating well-known brands Lambretta and Vison Streetwear, and is now turning over up to £30 million a year.

Mrs Briers argued that she never accepted the original proposals as full financial disclosure had not taken place. Instead her legal representatives alleged that the whole process was 'not negotiated but dictated by the husband.' Mrs Briers subsequently made a financial remedy claim against Mr Briers claiming to have an entitlement to a share of Mr Briers £10 million-fortune despite not having any involvement in the business since the divorce had taken place. Last year a Judge found she deserved a £2.7 Million slice of Mr Brier's wealth. Mr Briers is now asking the Court of Appeal to challenge this award and a judgment on this appeal is awaited at a later date.

The case of Mr and Mrs Briers presents striking similarities to that of Kathleen Wyatt and Dale Vince which was widely reported in the news earlier this year. At the time Kathleen Wyatt and Dale Vince divorced in 1992 the couple were penniless devotees of New Age doctrines. Following the separation, Dale Vince went on to establish a successful wind turbine business and his company Ecotricity is now valued at about £57 million. Under similar circumstances to Mr and Mrs Briers, the couple failed to formalise the financial terms of their separation through a Court Order.

In 2012, ten years after the divorce had taken place, Kathleen Wyatt brought a financial remedy claim against her former husband in the High Court. She claimed that as their financial claims had not been dismissed, she continued to have an entitlement to a share of her ex-husband's new found wealth. Whilst Kathleen Wyatt's claim was originally dismissed by the Court of Appeal, on a later appeal to the Supreme Court it was ruled that there was no time limit on making a financial claim. It has now been reported that the couple have reached agreement out of Court. Vince Dale has reportedly agreed to pay Kathleen Wyatt a £300,000 lump sum in full and final satisfaction of all her claims for relief. He has also agreed to make a contribution towards a share of Kathleen Wyatt's legal costs.

How could this situation have been different?

Had Mr and Mrs Briers finalised their agreement on the financial terms of the separation through a Court Order the situation would have been different. If correctly drafted, the Court Order would likely have included 'Clean Break' provisions meaning that Mr and Mrs Briers' claims against one another would have been dismissed. This would have prevented Mrs Briers from bringing her financial remedy claim. The same applies for Kathleen Wyatt and Dale Vince.

Obtaining a Court Order approving the financial settlement of a divorcing couple can be done with the Court being provided with a summary of the financial situation although it is not just a 'rubber stamping' exercise. A Judge has to be satisfied that what is proposed by a divorcing couple is fair taking into account all of the circumstances and their respective financial positions. In order to ensure that the agreement reached is properly reflected in the Court Order is it is important that early legal advice is taken. Whilst it can often be tempting for divorcing couples to simply 'forget' the financial side of things in an attempt to keep legal fees down, the above real life case studies have shown that this can prove to be a very costly mistake further down the line.

For the full story see: http://www.telegraph.co.uk/news/2016/11/28/wife-lambretta-millionaire-wins-27m-divorce-settlement-ten-years/

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