Do we really need a Court Order when my ex and I have agreed our finances?

The short answer is, yes. If you do not have a Final Financial Order approved by the Court, there is always a risk that your ex can make a claim against you. Any claim made can even include assets that did not exist at the time.

In a recent Court decision (Briers v Briers (2017) EWCA Civ 15), the Court clearly states that it is not possible to reach any final agreement without approval of the Court.

Background to the Case

The parties married in 1984 and separated in 2002 (18 years). The Decree Absolute (divorce) was pronounced in 2005. There was no Court Order concluding the parties’ financial affairs. In 2013 (11 years after separation), the wife issued legal proceedings applying to the Court for a Final Financial Order. The husband relied on an agreement which was entered into by both he and his wife in 2005 following a joint meeting with her Solicitor which he thought finalized the financial matters.

The first decision of the Court in May 2015 found that there had not been a full and final settlement and that there was no 2005 agreement as alleged by the husband. The Court at that stage decided that the wife had made it clear that she would require full financial disclosure in advance of agreeing any final settlement and this disclosure had not taken place.

As a side note, it is a requirement that both parties provide full and frank disclosure of all their financial affairs in proceedings for a Financial Order in order to make any Final Order binding.

The Appeal

The husband appealed the initial decision which was principally based on two issues as follows:

  1. An alleged agreement in 2005 and the husband maintained that agreement was final.
  2. Delay – the husband argued that the Trial Judge had failed to have sufficient regard to the wife’s delay in bringing the claim and the lack of any cogent explanation for that delay.

In answer, the Court stated the following:

  1. Whether the agreement in 2005 was binding is a question of fact. The Court found that the wife’s acceptance of the proposed deal was conditional on the husband’s full, frank and clear financial disclosure. The Court made it clear that in the absence of this full disclosure, it would be enough to defeat the appeal.
  2. In respect of delay, this case demonstrates that significant delay in making any claim is one of the major factors in play for the Court to consider in any subsequent assessment and it is an additional factor that the Court must take into consideration but it is certainly not determinative of the issue. It may lead the Court to apply a discount to any award given to the wife but it certainly does not eliminate any claim. Further, none of the authorities in this area of law suggests that sharing non-matrimonial post separation accrual of assets is excluded from any award that may be made.

It seems clear from the facts of this case that Mr and Mrs Briers had agreed what was to happen with their financial affairs on their divorce and it was this “agreement” that was relied upon by Mr Briers. Neither of them felt that they needed to do anything more with regard to their financial affairs. This case demonstrates clearly that the Court will retain legal authority to make a Final Order in financial proceedings between husband and wife on divorce. Regardless of any agreement the husband and wife reached between themselves, the ultimate decision rests with the Court. In this case, no such Order was obtained. 11 years later, an Application was made by Mrs Briers for a financial award. In the intervening period, Mr Briers had accumulated many business assets. It is understood that his business assets were worth in the region of £10m. The husband (11 years later) was ordered to pay to the wife a lump sum of £1.6m and to transfer to her 25% of his pension.

The lesson to be learned is that even after divorce, any financial claim between husband and wife continues to exist until you receive and/or obtain a Final Order of the Court.

The only way Mrs Briers could not have made a claim following divorce is if she had remarried. This is often referred to by lawyers as the “remarriage trap”.

We recommend that you seek independent expert legal advice, even if you have already divorced. If you wish to make a financial claim Warren’s Family Law can assist you in doing so.

Paul Summerbell, 5 May 2017
Warren’s Law & Advocacy

Disclaimer: While we do all that is possible in terms of ensuring its accuracy, this blog contains general information only. Nothing in these pages constitutes legal advice. You need to consult a suitably qualified lawyer from the firm on any specific legal problem or matter.