Divorce Leave phenomenon on the rise in London

Businesses are suffering as a result of divorce and separation. With over 60% of people in London estimated as having gone through a split themselves or at least knowing someone who has – recent research shows that 10% of those have either been forced to leave their job as a result of separation, or have witnessed a colleague do the same.

According to Resolution, who commissioned the research to mark Family Dispute Resolution Week; the strain of a separation has a real impact on workplace performance, with 17% of people saying they or one of their coworkers has had to take leave, due to stress caused by marriage break up. 15% of participants also said that separation and divorce have had a negative influence on efficiency in their place of work.

Despite these substantial figures however, many are voicing their concerns over the lack of adequate support for those going through a break up, with 34% saying more needs to be done to provide support in the workplace for those undergoing separation or divorce.

Divorce costs the British economy up to £46bn every year, with lack of productivity and sick leave playing a substantial part in these estimated costs. There are 364,320 small businesses in London alone. For them, losing even a singular member of staff, can have a huge impact on efficiency and productivity, as well as on colleagues who will have to share the absentee’s workload. For this reason, it is vital that employers recognize and take seriously, the impact personal issues such as separation can have on the individual and the workplace.

Family lawyer Zoe Bloom of Keystone Law, who acts as pod liaison officer for a group of London based sole practitioners and consultants, as part of Resolution, said:

“By the time an employer hears about a divorce, the employee may have suffered long period of emotional and possibly financial hardship. The indecision and uncertainty of that period often impacts on their performance at work, which the employee and employer will be anxious about. Addressing that diminished performance in a direct but sympathetic way will hugely support to anyone facing the legal consequences of separation. Allowing resentment and uncertainty to fester in the background, can only obstruct the long term productivity of the employee.

Having discussed the employee’s position openly, the employer can provide significant practical support by allowing flexibility for court appointments and openness in any financial disclosure requested. If the employer is in any doubt, the lawyers will always be pleased to discuss the issues with them, with the agreement of their client.

It is inevitable that employees going through divorce become sidetracked. The employer will find it frustrating but as a lawyer, I know that the employee is desperately trying to keep everything together. They will be the typical swan; gliding peacefully while paddling furiously underwater. Knowing that they have discussed things openly with their employer and that there is a clear set of support and boundaries to that support, will help them deal with one aspect of their lives, enabling them to recoup their performance more quickly.”

For more information contact zoe.bloom@keystonelaw.co.uk

This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.

The Rise of the Female Prenup

A successful entrepreneur will always be commercially minded, arguably none more so than those successful female entrepreneurs who might have committed even more than their male counterparts. It is that same commercial approach that must extend to private affairs and to protecting a hard-earned business from a potential divorce. In this article, Keystone’s Family specialist, Zoe Bloom, discusses the surge in females initiating prenuptial agreements, in order to protect their assets.

Starting young

Youth entrepreneurship is increasingly a viable option for women. DueDil and Enterprise Nation report the number of under 35’s starting a business has increased by 70% since 2006 and many of those are women. The successful ones will establish their business by their late 20’s when marriage might well be on the horizon. With marriage comes the romantic ideals of wedding fever but female entrepreneurs must look to retain their commercial spirit. There can be no question of risking a hard-earned business successes in the divorce courts. Many entrepreneurs seek to protect or ‘ring-fence’ their business by using prenuptial agreements.

The entrepremum

We are also seeing a growth in the number of ‘entrepremums’; mothers seeking ways of earning income, in order to provide for their children. The ‘entrepremum’ will typically retain most of the childcare and home-making responsibilities while building up the business. If successful, protecting the business from a divorce is essential, particularly where it may have more potential than the employed position of the husband. In these cases a postnuptial agreement is vital.

Protecting your investment

Of course, there is also the question of investment. Most start-up businesses will require a capital injection at one stage or another. The more secure the business investment, the lower the risk to the investor. Consequentially, the entrepreneur with the most secure business can expect the best range of options from potential investors. A nuptial agreement which protects the business can be an effective way of providing comfort to those investors.

The legal lowdown

Nuptial agreements are not yet enforceable. However the weight of case law and policy is now sufficiently strong for family lawyers to feel confident advising that, within certain parameters, they will be binding in the event of a divorce.

On a cost benefit analysis, a nuptial agreement should be viewed as an insurance policy by an entrepreneur. The cost is financial, in terms of the legal fees. But the emotional cost is unlikely to be equally, if not more, unpleasant. The benefit is, hopefully, the avoidance of having the business asset valued and then potentially divided between the divorcing couple. The other benefit is to gain clarification on what actually happens to the business and other family assets, so that there is no uncertainty during the marriage.

The constant risk is that one party will ask the court to ignore the agreement and that the court will entirely agree with them. However, this outcome is fairly extreme. Generally, when asked, the court will usually uphold the agreement but with certain adjustments, in order to ensure fairness – and even this may be a better outcome than the consequence the entrepreneur would have faced without the agreement being implemented in the first place.

This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.

Arbitration

High net worth couples are beginning to shun the traditional approach to divorce by turning to binding arbitration, as a more favourable alternative.

A recently-fashioned group of Family lawyers are advising that arbitration could prove to be an increasingly attractive option and not only for the wealthy; as it could also help those couples not eligible for legal funding.

The call comes as the strain on the family courts continues to increase and, many lawyers now believe that the government should seek to provide aid to ease the rising issue

The cuts to legal aid and the perceived cost of legal aid has created a torrent of hearings with litigants in person, which slows the system down considerably. An alternative is needed and arbitration may well bridge the gap between litigation and no legal support at all.

Two years ago, a scheme was launched which included 150 family arbitrators, solicitors, barristers and former family court judges. All of the members are qualified and authorised to offer family law arbitration and the process has already gained high-level legal backing. Both the High Court family judge Sir Nicholas Mostyn and family division president Sir James Munby have both strongly encouraged the use of arbitration.

The current system encourages divorcing couples to contemplate non-binding mediation, to allow arbitration for those people who, traditionally, would have qualified for legal aid.

Ultimately, arbitration is almost like having one’s own private court; whilst one cannot choose their own judge in family proceedings, with arbitration as long as all parties agree – the process can be conducted whenever and wherever, and with whoever the parties choose acting as arbitrator.

Leading Family and Divorce lawyer Zoe Bloom explains,

“As an active supporter of alternative dispute resolution methods, for me, arbitration is a fantastic addition to our offerings. We have offered it at Keystone, as an alternative to extremely complex cross jurisdictional litigation and also to much more simple specific issues resolution. There is a model and fee structure which can help many couples cut through very difficult and time consuming negotiations.

The biggest difficulty is finding other lawyers who will support the option and explain it clearly to their clients. Too often it is blocked for fear of losing fees. This can be improved by greater awareness and education to all family lawyers, including those at the top of their careers.”

This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.

Presumption of Parental Involvement: What Does It Mean?

A new law will come into effect as of today (22nd October 2014) stating that divorced or separated parents should both be involved in the upbringing of their children. The rule will protect “families from harmful and stressful battles in the courtroom,” according to children and families minister Edward Timpson

Back in April 2014, when the majority of the Children and Families Act came into effect, section 11 was quietly redlined, as the issue in question had caused a raucous in the media and much debate in parliament. This section introduces the presumption that ‘unless the contrary is shown, that involvement of that parent in the life of the child concerned will further the child’s welfare’.

Although under this new law, both parents will be presumed to play some part in their child’s upbringing, it does not necessarily mean that children will need to spend equal time with each parent. The only exception to a parent being able to spend time with a child is if there has been evidence which has been presented before the courts to suggest that involvement of that parent in the child’s life would put the child at risk of suffering harm.

It is likely that the new legislation will be welcomed, particularly for parents who do not live with their children. What remains a little unclear however, is what the impact will be on any future court decision as ‘the child’s welfare shall be the court’s paramount consideration’ just as it was before.

Keystone’s Family and Divorce expert Claudie Farndon observed, “One expects children disputes to be about increasing access. However, more often than not, the resident parent is left to shoulder too great a responsibility without the necessary support required. We hope that this change to legislation will encourage a more balanced approach and look forward to shared care in the true sense, perhaps reflecting a Scandinavian model.”

This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.

Law Commissioners Report: Qualifying Nuptial Agreements

Today saw the introduction of a new legal term ‘Qualifying Nupital Agreement’ or QNA. This follows the Law Commission’s recommendation that legally binding Qualifying Nuptial Agreements are introduced in place of full prenuptial agreements.

By entering into a Qualifying Nuptial Agreement a couple can set out exactly how they want their finances to be divided in the event of a divorce or separation. This is superb news for those couples seeking to clarify their arrangements.

Formal Requirements

If entered into correctly, the new QNAs will be enforceable if certain formal requirements are met, these being:

1. The QNA must be contractually valid;

2. The QNA must be made by deed;

3. The QNA must be made within 28 days before the marriage/civil partnership;

4. Both parties must have received disclosure material relating to the financial situation of the other; and

5. Both parties must have received legal advice.

It is recommended that 4 and 5 are compulsory and cannot be waived.

What can the QNA relate to:

The Law Commission has recommended that the primary purpose of a QNA will be to ‘ring fence’ certain assets from being shared in the event of a divorce. We would expect most clients to seek to ringfence inherited wealth and pre marital assets and this is consistent with the majority of instructions relating to pre nuptial agreements received to date. In addition, it will be possible to determine the proportions that capital wealth will be divided e.g. 60:40 etc.

It is recommended that QNAs do not deal with future needs for housing, childcare, income or any other financial needs. This is on the basis that too often these needs are unreaslitically assessed at the outset of a marriage when optimism abounds. So while a QNA may make provision for future needs, it is suggested that the court will have the discretion to reassess these if they are unfair. It is recommended that the benchmark for assessment is ‘financial needs’ rather than ‘reasonable needs, so encourage a less generous approach.
General Comment
The Report is welcomed by divorce practitioners who have been struggling with lack of clarity in this area. Many will no doubt raise criticisms of the Report, most likely relating to the things it doesn’t say, for example about excluding gifts and inheritance from being shared as a matter of general law. There will be questions relating to how needs will be assessed in general and whether it goes far enough. However this should not distract from the very positive work conducted and the welcome guidelines provided.

Finally, it is pleasing to note that the opening paragraphs of the Executive Summary of the report refers to the overiding aim to attain independent living for the parties. While it recognises that this may take time, it is extremely helpful to have this set out in such clear terms. We are still seeing far too many cases where long term maintenance orders are made which severely hampers the ability of either party to attain independence and freedom from the other party.

Valentines Day divorce?

Chocolates, flowers – and a divorce? What is meant to be the most romantic day of the year is also a popular time for many couples to call an end to their marriage. There are now a variety of options available to avoid divorce becoming a courtroom battle. In this article we look at the options available should your Valentine’s Day not be filled with roses.

Valentine’s Day 2013 was a marketing opportunity for one enterprising divorce lawyer in Michigan, USA. He decided to offer a free divorce to anyone who could come up with the most miserable, woeful and depressing story culminating in a separation. Potential ‘winners’ were invited to share their stories in the hope of being provided a totally free divorce. He received over 500 entries.

It is undoubtedly a very un-British approach to legal marketing but if the press is to be believed, it reflects the trend for more family breakdowns at this time of year. The hotbed of emotions and expectations surrounding Valentine’s Day can cause these breakdowns to be the angriest divorce lawyers see. The lawyer’s job is to see through those emotions and guide the client through the legal process.

There are now a range of options to resolve conflict which your lawyer can advise you of, allowing you to make an informed decision about the process which would best suit you and your family circumstances.

  1. Mediation: Couples will attend mediation sessions with a fully trained mediator (often with a background in finance or family law) who will provide neutral guidance to the couple. Once an agreement has been reached, the mediator will produce a summary which the lawyers will (hopefully) implement.
  2. Collaborative Law: Couples will each have their own lawyer to represent them in a series of round-table meetings. The lawyers make a ‘no court’ promise, and cannot act in the event that the collaborative process breaks down. Where necessary, third-party neutral advisors (financial planners, consultants to help manage the emotional journey, etc.) can be introduced so that the right professional is paid to do the best for the client.
  3. Lawyer-To-Lawyer Negotiations: Again, each person has their own lawyer but there is an agreement to undertake the negotiations informally, often at a round-table meeting. If things cannot be agreed that way, the court might be relied upon.
  4. Arbitration: The couple (via lawyers) appoint an arbitrator who will impose a decision on them. This can be particularly helpful in high-conflict divorces where the parties have busy schedules or wish to resolve matters away from the media.

Of course, for individuals who are vulnerable, face uncooperative, unreasonable or unrealistic ex-partners or are just really really cross, litigation may still provide the best forum for managing the dispute. The key is for you to make that decision, having been informed about and guided through the various options available.

Considering a V Day proposal? Consider a prenuptial agreement…

We receive telephone calls about prenuptial agreements most weeks. The first tentative enquiry is usually embarrassed, but gradually, when the potential client realises how completely normal it is to enter a prenuptial these days, their confidence grows.

What then, is the current position, so we can give you confidence to make the first call?

 Are prenuptial agreements enforceable?

 

The question of enforceability of prenuptial agreements only arises during a divorce, where one party seeks a Court ruling on the terms entered into. In these circumstances, if there is a prenuptial agreement in place, the Court may rule that the agreement is to be upheld. Where in the past the prenuptial would be guidance to the Court, now the fact of the agreement may alter the outcome and be the deciding factor in the Court’s decision.

 

This may sound inconclusive but it is a significant step towards the more European approach which gives complete enforceability to prenuptial agreements.

How do I do it?

 

It would have been agreeable if we had set out a clear list of ‘Steps to be taken’ in order for a prenuptial to be enforceable. Sadly we don’t, all we have is the Supreme Court’s guidance that

 

“The court should give effect to a nuptial agreement which is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement”

In effect, this means that those entering into a prenuptial agreement that they intend to be enforceable in England should do so because they want to and do so with a clear understanding of what it means to sign the agreement.

To assist in this endeavour and to be more able to provide evidence that this was the case, it would be sensible to ensure that the parties had available to them all the material facts and information which is relevant to the decision making process. Further, independent legal advice for each party would help to persuade a Court that there was no undue influence and that each party had a clear understanding of the implications of signing the agreement.

 

Finally, it should be the clear intention of each party to the agreement that the agreement will have effect in the event of the breakdown of marriage. As such, any party entering a prenuptial agreement now, after the decision made in Radmacher v Granatino, is more likely to be able to demonstrate that intention.

A note on postnuptial agreements

 

MacLeod v MacLeod gave us the Privy Council decision that post nuptial agreements were distinct from penuptials in that they were capable of being enforced by the Courts. This was upheld by the decision in Radmacher v Granatino.

What now?

We do not have a simple ‘yes’ to the question of whether pre or postnuptial agreements are enforceable. What we do have is a good indication that where a couple enter into a pre or postnuptial agreement freely, with all the material facts at their disposal and with the clear intention that the agreement will hold in the event of divorce, the English Court will be ready to give it appropriate weight.

 

We must now wait for the outcome of the Law Commissioners Report originally due in 2012 which might have the effect of changing the law through legislation.

Should I enter into a pre or postnuptial

 

Probably.

 

This is stated with the caution that each party must seek independent legal advice before signing any agreement. However, now we have an indication that the agreement is more likely to be effective, a prenuptial agreement should help to avoid unnecessary legal and emotional costs in the event of a divorce. Even where assets are insubstantial, coming to a reasonable agreement during good times, will help each party move on freely and quickly in the event the marriage ends.

 

Individual divorce solutions for individual people

There is a cliche of families separating over Christmas and of New Year’s Resolutions that you will finally leave the partner who is driving you wild (not in a good way). The papers love to trot out the statistics and some matrimonial surveys are timed in order to maximise the marketing opportunities of ‘D Day’, the day on which divorce practitioners are most likely to receive a telephone call from a new client.

An individual shouldn’t feel like a statistic. Their personal circumstances are individual to them. Whatever has happened in their lives bringing them to the door of a professional is their own personal story, not another casualty of Christmas.

This is an important message which is fundemantal to the way Access Collaborative Lawyers members work. We are a group of professionals who want to understand the needs of the person in front of us. Having taken the time to understand them, we will tailor an action plan which will make things manageable in the short term and solve the issues in the long term. We do not have a set way of handling a problem and are able to draw on the wide variety of skills available among our group members.

If you would like to be in touch with a member of Access Collaborative Law, please don’t be afraid. We pledge not to mention statistics or the January blues!

 

Collaborative Law is Dead!

Oooooooooooh no it isn’t. Forgive me, tis the season of the pantomine after all.

The message coming from some powerful firms and individuals is that collaborative law doesn’t work. The excuses given include that client’s don’t like it, it’s too expensive, the costs are hard to manage and that it is very last season, dahlink.

The more I hear this message, the more apparent it is that it is the solicitors themselves who don’t like it.

There are several reasons this might be but the underlying reasons are likely to be that (a) solicitors don’t like relinquishing control over clients; and (b) they fear losing the client (i.e. money) if the collaborative process fails. Neither of these reasons are very client friendly.

The real problem is that it is contagious.

If the biggest firms and most powerful lawyers in an area are sending out a message, it will be reiterated across the sector. Equally, if the senior lawyers in a department do not support collaborative law, the juniors will necessarily follow suit. Their careers depend on it. As a result, the option is barely reaching the clients and the statistics are validating the opinion that client’s don’t like it.

It is extremely easy for family solicitors to manipulate clients during the very early stages of their separation, particularly when the client is paying large sums of money to them. Even the most experienced and commercial clients may be relieved to have identified someone to represent them in this personal area of their lives. With the retainer goes a huge amount of trust in the chosen lawyer and if that lawyer does not like collaborative law then the option will not be properly offered to the client. It seems this is happening across the city and probably in other areas too.

Before we deal with the need for high quality options meetings, transparent costs and support for those engaged in the collaborative process (subjects of later blogs) we need to deal openly with this fundamental problem.

By nature, family lawyers tend to be independent slightly controversial sorts. We need some of that free thinking spirit to support the collaborative process even where it might feel like it exposes you.

If anyone reading this wishes to discuss the issues raised, please contact Access.

 

Keep it out of Court

If you believe that you need to go to court to be divorced, you are in good company. A recent survey by Resolution, the family law group, discovered that around half of those surveyed (a group of 4,000 British adults) would use the court if they were to get divorced.

For all the negative press, this is progress. Half the adult population are aware that you don’t have to go to court and that there are alternative ways of resolving family disputes. That’s half the population who may be able to resolve their disputes amicably, quickly and in a dignified fashion. Hopefully the other 50% won’t have a dispute to resolve.

The courts are extremely short of time and simply cannot take into account the intricacies of family life. It is not the forum to use if you wish to end a relationship and part feeling good about yourself. It is also extremely expensive.

Resolution’s campaign, keep it out of court, is well timed. On Friday 22 November 2013 judgement was released on Young v Young.  Mr Justice Moore opened his judgement with a furious criticism of the level of fees spent – £6.4m by the wife. While those of us at the coal face of family law don’t tend to see fees at this level, we do come across cases where too much family money is committed to a process which is upsetting everyone involved.

We’d like to see more people talking about their options before taking action. If you read this, please raise the possibility of mediation, collaborative law or arbitration with your divorce professionals and seek to get fully educated before taking action.

Resolution’s findings are as follows:

- 51% say they would consider trying a non-court-based solution instead of going court if they were to divorce in the future.

- 23% of British adults believe that non-court based methods of divorce and separation “make the terms of the separation clear to both parties”.

- 24%think that non-court based methods of divorce “protect the rights of both parties”.

- 52% of British adults say they think that non-court based methods of divorce and separation “are better for the wellbeing of couples”.

- 50% of British adults say that “non-court based methods of divorce and separation are better for the wellbeing of children”.