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“I think I under-settled during my divorce – is it too late?”

Do you think you may have undersettled?

The feeling that you under-settled and didn’t achieve the right outcome can eat away at you, causing great anxiety and stress.

I am often approached by clients for a second opinion following divorce where a financial order has been made but one party feels that they got a raw deal or were let down by the legal system.

I walked out of my Final Hearing feeling elated, because although I’d accepted a very low settlement sum, I was finally free of my abusive ex-husband. However, months down the line I realised that I would be going into old age with nothing.

I had no money for a house and no child maintenance provision. Zero. With his expensive fancy lawyers he had got away with not even helping me to provide for our children. I have two and was married for 15 years! Had I been stupid? Or, was I right to get on with my life? These thoughts went round and round in my head and started to interfere with my mental wellbeing. It was no good… I had to get a professional opinion. Was it worth going back into the case, maybe using the Children’s Act?

Member of The Group Hug Community

Your ex starts living a life of luxury again

There is a common thread that tends to run through these cases. Parties litigate, they go to court and they obtain a financial order. In months or sometimes years down the line one party then has cause to suspect that the order is unfair. Perhaps the financial disclosure did not stack up. Property with modest values may achieve much more than anticipated on sale. Your ex-spouse begins living a lifestyle that dwarfs what you are able to. Nice holidays, cars, or perhaps gifts for the children leave you feeling that justice simply has not been done.

Settlements are often a problem area due to one person feeling they got a bad deal.  Where the legal team have done all they can, I work with the client look at where they can accept the situation and move forward without any resentment

Debbie Rose – Divorce Coach – The Hug Directory

As a family lawyer this is a scenario I have seen a number of times. In this article, I have attempted to lend an objective and balanced view on the matter, drawing on my experience and leading judicial authorities to summarise your options for redress if you think things need a second look. 

First things first, in the majority of circumstances when a financial order has been made it will be in full and final settlement of all matrimonial claims. It is possible to set aside and revisit financial orders, however the circumstances in which you can do this are usually the exception rather than the norm.

if yo uthink you may have under-settled speak to a lawyer

So what does the law say?

The leading authorities on this topic are to be found in Sharland and Gohil; which were determined by the Supreme Court in 2015. These confirm that if there has been material non-disclosure in divorce/financial proceedings then this is a sufficient ground to set aside a financial order.

There are two strands to this test. To persuade a court that an order should be re-visited a party would need to demonstrate that:

  1. There was an element of non-disclosure during proceedings; and
  2. The non-disclosure was material

In practice what this means is that if a party fails to comply with their duty of disclosure this introduces a risk that any order made by the court could be set aside.  

What should you do if you want to challenge an order?

Just because there has been a change in circumstance does not mean a party has necessarily failed to comply with their duty of disclosure. This would need to be carefully investigated; certainly by your lawyer and potentially other experts. Many family lawyers work with forensic accountants who could lend a second opinion and help explore this in more detail. The clearer the evidence, the easier it will be to identify whether there has been material non-disclosure and thereby the greater the likelihood that you could persuade a court to set aside a financial order if this is appropriate.

It’s no good wondering “what if”; that will send you slowly crazy! If you have a suspicion that you have not got the right deal, speak to an expert and find out once and for all. This applies to anything in life. If you don’t know, ask someone who will know the answer and relieve your anxiety.

Member of The Group Hug Community

Demonstrating non-disclosure

In many cases material non-disclosure cannot be demonstrated. This might be because a concerned spouse just does not have the money or wherewithal to properly investigate the issue. Alternatively, even where they do, there just might not be sufficient evidence to corroborate their suspicions and inevitably there are occasions where such suspicions are unfounded. Indeed, there are also circumstances where a former spouse’s financial position has improved, but this has followed the divorce, such that their lifestyle now sits above what you may have been accustomed to during your marriage.

If the evidential threshold cannot be met to demonstrate material non-disclosure, but it is clear that your former spouse’s financial position has improved, there may still be other options available that do not necessarily require the effort, time or expense of trying to re-open financial proceedings to set aside a financial order. Whether this is possible however may well be dependent upon your circumstances.

Spousal maintenance

Should your financial order include provision for spousal maintenance then bear in mind that this can be reviewed, especially if you believe your former partner’s financial position may have improved or if your financial position has deteriorated. Providing the term of the order has not expired, the court can consider varying the quantum of payments made by the paying party – meaning this could be increased or decreased depending on your financial positions.

If your order is for an “extendable-term”, consider seeking advice before its expiry to see if this can be varied. Doing this in good time and certainly 6 to 12 months before its expiry would be prudent.

Chat about your situation with other Group Hug members in the forum

Check your order

Where orders for spousal maintenance have been made, it is worth taking a look at the drafting to double check whether this includes provision for variation each year in line with any changes in inflation. Orders will often (though not always) include this, with any changes in the amount paid usually tracking against the retail prices index or consumer prices index. If this is included in the order, make sure you are working out any uplift that should be applied each year and that this is factored into the monthly payments. Even where this is included in orders at the time of drafting it can often be overlooked or forgotten by parties later on and this can result in the recipient of such payments losing out on potentially thousands of pounds over the term of the order.

Something to think about:

On a separate note, if you are worried about the longer term risk of a maintenance order, any application to vary could trigger an option to capitalise the payments – in essence trading a monthly income stream by way of periodical payments for a capital lump sum. There are advantages and disadvantages to each option and both should be carefully considered based on you and your former spouse’s financial circumstances which inevitably may change over time.

What about the children?

If you are entitled to child maintenance make sure you are keeping an eye on the amount paid and remember to review this each year. If the Child Maintenance Service (CMS) calculate this on your behalf they should undertake an annual review to check this. If they don’t, make sure you are and if you feel your former partner is not co-operating don’t be afraid to refer it to the CMS. You need to be satisfied that you have enough information about your former partner’s financial position to calculate this properly if you are doing this yourself. Ideally this should include corroborating evidence such as their P60, last three months wage slips and tax returns if relevant.

You can find out more information about child maintenance and access their online calculator here: https://www.gov.uk/calculate-child-maintenance.

do you think you have undersettled

Schedule 1 claims?

If there are children of the family then you may have a potential claim under schedule 1 of the Children Act 1989. This is a really important but often under-utilised law that gives the court power to make orders to provide financial provision to another parent. Such financial support will usually only last until a child is 18. The court’s power in this regard is relatively wide ranging and may include top up orders for maintenance (via periodical payments), capital lump sums or property adjustment orders to meet housing needs. Advice around the scope of such orders and likely outcomes should be obtained at an early stage and certainly before an application is made to the court. 

NHS – What is Anxiety?

Schedule 1 claims can be brought in a wide variety of situations – they are not limited to the rich and famous and in principle such applications can be made by anyone who has a child where financial provision from the other parent is required to meet their needs.

Before a court will make an order under schedule 1 it will consider:

  1. the financial resources of both parents
  2. the financial needs of any children;
  3. the original intentions of the parents in relation to how their children would be raised (e.g. was there an expectation they would be privately educated?); and
  4. any disabilities of the children if this is relevant.

In practical terms if the court does make an order under schedule 1 it could provide a home (or capital towards a home) for the other parent to live in with their children during their minority. Usually, in this scenario such property would be held on trust and may be subject to sale when certain conditions are met (e.g. the children reaching 18), though this is not always the case. Periodical payments can also be used to top up child maintenance or to assist with payment of private school fees for example.

But how can I afford this?

Considering further court applications is all well and good but often the main challenge for people in practice is their capacity to explore this in the first place. Where there is an imbalance in financial resources finding a means to fund legal costs is not always straight-forward and can be daunting.

In some circumstances, you may be able to consider an application for your former spouse to pay your legal costs but this is not always possible and it is likely that you would need to obtain some initial legal advice to look at this more carefully.

Look after your mental health and wellbeing

Funding options and ideas

If this is a non-runner, you may be able to raise a loan or borrow funds to meet legal costs. You could also make enquiries to see if you can obtain some initial advice from a lawyer on a free of charge basis in the first instance, or within clear parameters whereby any legal costs are fixed or capped to a specific level. Your legal adviser may also be able to sign post you to other services that could help, such as McKenzie Friends or third party experts.

And bear in mind, if you do decide to instruct a legal representative you are in control of the relationship and you are able to set parameters for what you are, and are not, prepared to pay. You might decide for example that you only want to use a solicitor at key points in an application to help manage legal costs. This can help ensure you have more control over where and how your representative assists you in your matter.

If you would like any assistance in relation to the topics that have been touched on in this blog feel free to contact me. You can find me in The Hug Directory – Mark Heppinstall of Freeths LLP

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