What a financial settlement actually is - and why your agreement isn't one
In legal terms, a financial settlement is a financial order made by a court. Your own privately signed agreement is not a court order, no matter how carefully it was drawn up.
There are two routes to securing an order. You can either agree on the terms together and instruct a solicitor to incorporate these into a draft consent order and ask the court to approve them, which produces a sealed, legally binding, clean break consent order. Or, if you cannot agree, you can ask the court to decide for you by issuing financial remedy proceedings.
Why your agreement isn't binding, however fair it is
You can agree on everything, write it all down, both sign it, and still not be legally protected. GOV.UK puts it bluntly: “If your agreement is not legally binding, a court cannot enforce it if there are any issues later.”
This is not about anyone doubting your good faith. A private agreement simply cannot stop a future claim. Only a court order can do that.
The same applies to a separation agreement. It is a very useful document, and it is one we prepare for clients, but it is not a court order and it does not dismiss financial claims.
If you have already agreed on how to divide assets between you, ensuring that agreement is approved and legally binding by the court is the opposite of ‘starting a fight’. It is exactly what stops a fight from happening later down the line.
What getting one actually involves
- You either agree the financial terms between you, or the court decides them.
- Both of you must provide financial disclosure.
- The court has to officially approve the agreement. Where court proceedings are issued and the court makes the order, the Judge works through a statutory checklist of factors (section 25 of the Matrimonial Causes Act 1973) In order to do so, the court requires full financial disclosure including bank statements, payslips, company accounts, property valuations etc
- Where you have agreed terms and are asking the court to make a consent order, the exercise is different: the court may make the order in the agreed terms on the basis only of the prescribed summary of information filed with the application.
- The duty to disclose your finances continues up to the very moment the order is made. An order obtained on incomplete disclosure can be set aside afterwards if the missing or incorrect information would have made a substantial difference.
- What you ultimately walk away with is a sealed court order setting out exactly what each of you receives, and which legally dismisses any future claims.
HEATHER BROADFIELD
HEAD OF FAMILY LAW
TO CONTACT HEATHER PLEASE
CALL01744 626 600
EMAIL[email protected]
“Our goal is to simplify the process and ease your stress so you feel confident and cared for every step of the way.”
Our team have many years of experience in helping clients and their families navigate the legal process during some of life’s most challenging and difficult times. Led by our Head of Family Law, Heather Broadfield, our Family Law department handles even the most challenging and intricate cases with professionalism and care. We are here to provide guidance and expertise every step of the way.
TO CONTACT HEATHER PLEASE CALL01744 626 600
EMAIL[email protected]
