The importance of obtaining a financial consent order

What is a financial consent order?

A financial consent order is a formal document that sets out the financial agreement between a divorcing couple or a couple dissolving a civil partnership.  A consent order can prevent a former spouse or civil partner from bringing a claim in the future and can sever financial ties (a clean break order).  The contents of the consent order depend on the financial circumstances of the couple and what they have agreed. For example, a financial consent order could set out that a couple’s home is to be sold immediately or at a future date, and will stipulate how the proceeds of this sale are to be divided. 

Why is a financial consent order so important?

Your and your partner’s marital lives are formally separated when you are granted either your final order or decree absolute (depending on when you started the process). Many people assume that this means your financial ties to one another are automatically severed – they are not. As the following example illustrates, obtaining a final order (or decree absolute) with no accompanying financial order, leaves financial claims open, leaving open the possibility of your former spouse or civil partner commencing a claim in the future.

A case study: the case of Vince v Wyatt [2015] 

Vince v Wyatt was a prominent case that made it all the way to the Supreme Court. The couple married in December 1981 and had one child together. Ms Wyatt also had one child from her previous relationship who Mr Vince treated as his own throughout the relationship. The couple then separated in 1984 (although this date was disputed) and were granted their decree absolute in October 1992.  Crucially, the couple did not enter into a formal agreement (consent order) about their finances when they separated.  Nor did Ms Wyatt request Mr Wyatt's financial support at that time; Ms Wyatt brought the children up alone, in very strained financial circumstances. In 1995, Mr Vince formed the green energy business, Ecoticity, which became incredibly successful and resulted in him becoming a multi-millionaire;  his company being valued at c.£57 million. Ms Wyatt had no such change in fortune and her circumstances remained very modest.

Ms Wyatt made an application for financial provision in the form of a lump sum in 2011, 27 years after the couple initially separated. Mr Vince then applied to the court to strike out Ms Wyatt’s claim due to the length of time that had elapsed since the divorce. The case made its way to the Supreme Court which determined that Ms Wyatt’s claim could proceed, notwithstanding the delay.  This left the court to decide what, if anything, Ms Wyatt was entitled to.

In the end, an agreement was reached that Ms Wyatt would accept £300,000 in full and final settlement of all outstanding financial claims. Whilst at the time of their divorce the couple had no money or assets and so a financial consent order probably didn’t seem important, the court case, costs and payment would have been avoided had a consent order been agreed.

The Lesson

Vince v Wyatt is an extreme and somewhat unusual case, but it confirms that there is no time limit for ex-spouses or civil partners to bring a claim.  And even for cases where a change in circumstances is not as dramatic as Mr Vince’s, the case illustrates that if parties do not enter into a consent order that severs their financial ties when they divorce, they will not have financial certainty and independence.  Whether there’s a future lottery win, inheritance or simply savings or pension benefits built up, assets will not be protected from future claims by a former spouse until there is a consent order confirming so.

Reaching an agreement on a financial consent order

A couple can reach an agreement between themselves, whether directly or via mediation or through solicitor-led negotiation. A solicitor(s) can help them to turn the agreement into a formal consent order which can then be sent to court for approval.

There is no need to go to court. The court’s role will be limited to reading through a copy of the financial consent order. Once a judge is satisfied that the agreement is drafted correctly and is fair to both parties, it will become binding as soon as your divorce/dissolution is finalised. 

For more information, please contact Lisa Honey of Tees. 

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