According to the Family Court Statistics Quarterly for April to June 2022, the number of new divorce applications as compared to the same period last year was up by 22%, with this being the highest number of new applications in a decade.
This increase has likely been driven by the introduction of “no fault” divorce on 6 April this year, with parties no longer having to lay blame to the other for a marriage breakdown, or having to wait for at least two years of separation. The changes that were brought in were well publicised, and no doubt led to some couples holding off on starting the divorce process until the new regime came into place.
However, and whilst the number of new divorce applications may be at their highest for a decade, surprisingly this does not correlate to an increase in the number of financial orders being made, either by consent or on a contested basis. In fact, and according to the same report, the number of financial remedy applications was actually down 31%, and the number of disposal events (where parties file an agreed financial order by consent) was down 26% as compared to the same period in 2021.
It is not clear as to why the number of financial orders being made is down, but it could be that more people are now dealing with their divorce applications themselves rather than instructing a solicitor to deal with it for them. This can lead to important oversights, but does it also mean that as a result, many are now overlooking the importance of having a financial order? For the avoidance of any doubt, the final order of divorce (formerly called the decree absolute) does not bring an end to the financial claims that one party has against the other.
If a couple decides to end their divorce without having the security of a financial order the following are all potential issues that can arise:
1. A financial claim being made many years after the divorce was finalised. Delay is not a bar to making a financial remedy application, and there have been high-profile cases where such an application has been made long after the divorce has ended. A delay could lead to a party receiving less, and often results in matters being more complicated than if there had been a resolution at the point of separation, usually due to issues about a spouse acquiring assets post separation.
2. Pension and life insurance benefits could be lost. On the death of one spouse the survivor would usually have rights under the deceased’s pension to a widow’s entitlement. However, and once a couple are divorced, those benefits will almost certainly be lost. If there is life insurance in place it may only pay out to a “spouse”. Again, and after the marriage is legally ended, those benefits could be lost.
3. Loss of rights under a Will. A party who is married and provided for in a Will may feel a sense of security but in fact divorce terminates that provision.
4. A party may remarry. If financial claims have not been made before the remarriage then they will become statute barred, meaning that they can longer be pursued under the matrimonial legislation (except claims against pensions).
5. The death of one party. An application for a financial remedy under the matrimonial legislation cannot be brought against the estate of a deceased ex-spouse.
In view of the above, any couple who has decided to commence a divorce application would be well advised to seek early advice as to where they will stand in respect of financial claims before they proceed with finalising their divorce. This would be the case even if the couple only had minimal assets at the point of separation as this can change.
Antony Clapp Solicitors specialise in all aspects of Family Law and are adept at assisting clients with their financial settlement issues. Contact our experienced team to arrange your consultation with one of our experts.