Nicola Crowther of Crowther Mediation explains why divorce and financial disclosure are a necessary and unavoidable part of the process.
Financial Disclosure in Family Mediation
As a mediation practice we have always maintained, mediation is not a substitute for legal advice and it is not a means of circumnavigating financial disclosure.
Family mediation is about savings individuals time and costs by avoiding a court process. Finding a resolution outside of the court process is significantly quicker and cheaper.
However, if we are going to avoid the court process, we need to emulate it. I am always saying to my clients; ‘ If a judge would want to see it to make a decision, you will both need to see it to make a decision’. I am, of course, referring to financial disclosure.
What is Financial Disclosure?
In financial proceedings (and in mediation) clients are asked to complete ‘full and frank financial disclosure’ and exchange the same with each other. This usually takes place in the form of a Form E. This is a court form designed to aid disclosure. The form asks clients to disclose every conceivable asset and liability, including business interests, pensions and imminent payments such as inheritance, redundancy or personal injury claim.
Much of the form is ‘not applicable’ to many clients – it isn’t every day we see offshore investments or valuable paintings! But where clients declare an asset, they must complete that section of the form and provide documentary evidence in support. For example, if a client declares an ISA they must provide details of the bank and account number, along with statements showing the current balance, investments and withdrawals over the most recent 12 month period. The same goes for all bank accounts, credit cards, PEPs, TESSAs, bonds …etc
If this sounds like it’s a pain to do – that’s because it is. After a long day at work, dealing with the kids and being in the middle of a divorce NOBODY is looking forward to sitting down and filling this form out. Then there’s the thought of gathering all the documentary evidence, hunting for documents long hidden away or being on hold to the bank trying to locate the details of a savings account you haven’t looked at for years.
I understand. I really do. This is a horrible task. But it’s so important to do it and get it right.
Why is it important?
Without this open, honest sharing of information how can we be sure there is a fair division of assets? Nearly every client tells me they ‘just want what is fair’. Without full and frank financial disclosure we will never be able to determine what is fair and by ‘we’, I mean the clients, the solicitors who need to give advice on the settlement proposal and ultimately the judge who will be asked to make this legally binding.
The lack of financial disclosure is one of the biggest barriers to a successful outcome in mediation. Lots of clients come to mediation, incorrectly believing it’s a means of avoiding having to do financial disclosure – ‘surely this is something a court needs to see, not a mediator?’ .
Can I refuse financial disclosure in a Divorce?
I’m afraid there’s no avoiding it. If you fail to produce adequate financial disclosure during mediation, you will ultimately delay the process and find yourselves going down the court route, where you will be ordered to complete financial disclosure.
Who can help with a Financial Disclosure?
They say it takes a village to get divorced. Clients will need help from solicitors, financial advisors, pension experts, valuers, therapists, friends, family etc. I’m a firm believer in accessing help when it’s needed and savings costs where possible. With this in mind, I would recommend the use of a good divorce coach to help with the overwhelming task of producing financial disclosure. A divorce coach, will be a lot more cost effective than asking your solicitor to help you with disclosure.
Get in touch
Financial disclosure is unavoidable and a very necessary part of the mediation process. Take your time, fill out one page per day, get help if you need it and be kind to yourself. If you need any guidance on your situation and would like some help, get in touch with a member of our Mediation team now.
