Financial remedy proceedings in England and Wales:

A complete guide to divorce financial settlements

When a marriage or civil partnership breaks down, divorce or dissolution deals with the legal ending of the relationship. However, it does not, by itself, resolve how money, property, pensions, debts and future financial support should be dealt with.

Financial remedy proceedings are the court process used in England and Wales to resolve financial claims following divorce, dissolution, nullity or judicial separation. They allow the family court to decide how assets should be divided.

For many separating couples, the financial settlement is the most important and long-lasting part of the separation process. Although, some separating couples may also have disagreements regarding the care of their children which will also be of great importance to the parties. However, child arrangement proceedings are a separate set of proceedings and therefore not discussed further in this article.

For financial settlements, a properly drafted financial order provides certainty, finality and protection against future claims.

What are financial remedy proceedings?

Financial remedy proceedings are applications made to the family court for financial orders following the breakdown of a marriage or civil partnership.

The court can make a wide range of orders, including:

• Lump sum orders
• Property adjustment orders
• Orders for sale of property
• Pension sharing orders
• Pension attachment orders
• Spousal maintenance orders
• Clean break orders
• Variation of existing financial orders

The purpose of the process is not simply to divide everything equally in every case. The court’s objective is to reach a fair outcome by considering the parties’ financial resources, needs, contributions and circumstances.

Do you need a financial order after divorce?

Yes, in most cases, it is advisable to obtain a financial order even if you and your former spouse have already agreed how to divide your finances.

A divorce final order ends the marriage, but it does not automatically dismiss financial claims. Without a court-approved financial order, either party may potentially bring financial claims in the future.

This can include claims against income, property, pensions, savings, inheritance or other assets acquired after separation.

A financial order provides legal certainty and can prevent future disputes.

Reaching agreement without court proceedings

Before issuing a contested financial remedy application, parties are encouraged to resolve matters through non-court dispute resolution where appropriate.

This may include:

• Direct negotiation
• Solicitor-led negotiation
• Mediation
• Collaborative law
• Private financial dispute resolution hearings
• Arbitration

In many cases, agreement can be reached without a fully contested court process. Where agreement is reached, the parties can ask the court to approve a consent order.

A consent order records the financial agreement in legally binding terms. Once approved by the court, it can provide a clean break where appropriate and prevent further financial claims.

The MIAM requirement

Before making most financial remedy applications, the applicant is usually required to attend a Mediation Information and Assessment Meeting, commonly known as a MIAM.

A MIAM is not mediation itself. It is a meeting with an authorised mediator to assess whether mediation or another form of non-court dispute resolution may be suitable.

There are exemptions, for example where there is domestic abuse, urgency, bankruptcy issues, or where mediation is otherwise unsuitable.

If mediation is not appropriate or does not resolve the dispute, the applicant can proceed with a court application.

Starting financial remedy proceedings: form a

Financial remedy proceedings start by filing form a with the family court.

Once form a is issued, the court sets a timetable and fixes the first hearing.

The standard court process normally involves three main stages:

1. First Directions Appointment
2. Financial Dispute Resolution Hearing
3. Final Hearing

Not every case reaches a final hearing. Many cases settle before then, particularly at or shortly after the financial dispute resolution hearing.

Financial disclosure and form e

Financial disclosure is central to financial remedy proceedings. Each party is required to provide full and frank disclosure of their financial circumstances. This is usually done by completing form e.

Form e is a detailed financial statement covering matters such as:

• Income
• Employment
• Business interests
• Bank accounts
• Savings
• Investments
• Property
• Mortgages
• Debts and liabilities
• Pensions
• Tax
• Insurance policies
• Future needs
• Monthly expenditure

The form must be supported by documents, including bank statements, payslips, pension valuations, mortgage statements, property valuations, tax documents and business accounts where relevant.

The duty of disclosure is ongoing. If a party’s financial position changes during the proceedings, that change should be disclosed. The parties are also required to update their financial disclosure after form e before the financial dispute resolution hearing and then again before the final hearing.

Failure to provide accurate financial disclosure can have serious consequences. The court may draw adverse inferences, make costs orders, or in some cases set aside a financial order obtained on the basis of incomplete or misleading disclosure.

Questionnaires and further disclosure

After forms e have been exchanged, each party may raise a questionnaire asking for clarification or further documents in respect of the other party’s form e.

The purpose of a questionnaire is to resolve gaps in disclosure and identify the real financial issues in dispute.

For example, one party may request:

• Further bank statements
• Clarification about transfers
• Business accounts
• Evidence of income
• Updated pension valuations
• Property valuation evidence
• Details of debts
• Information about trusts or overseas assets

The court can decide which questions are relevant and proportionate.

The first directions appointment

The first directions appointment, often called the FDA, is the first court hearing in the standard financial remedy process.

The FDA is primarily a case management hearing. The judge considers what further evidence is required before meaningful settlement discussions can take place.

The court may give directions for:

• Replies to questionnaires and schedules of deficiencies
• Property valuations
• Evidence of mortgage raising capacities
• Evidence of purported housing needs
• Pension reports
• Business valuations
• Tax evidence
• Updating financial disclosure
• A schedule of assets
• Without prejudice or open offers of settlement
• Costs estimates
• Filing position statements
• Other preparation for the next hearing

In some cases, where disclosure is complete and both parties are ready to negotiate, the court may treat the FDA as a Financial Dispute Resolution Hearing. However, this only happens where the case is sufficiently prepared.

The parties may also agree to adopt the accelerated procedure which involves the parties filing certain documents with the court, which includes a draft order setting out agreed directions to the next hearing. If the court approves the draft order, it will then usually vacate (cancel) the FDA, so the parties do not have to attend. This procedure tends to happen more in cases where both parties are legally represented.

Expert Evidence

Expert evidence may be required where specialist valuation or technical input is needed.

Common examples include:

• Valuation of the family home
• Valuation of investment properties
• Pension actuarial reports
• Business valuation reports
• Tax advice
• Forensic accountancy evidence

The court will only permit expert evidence where it is necessary and proportionate. In many cases, as a minimum it is usual for there to be a family home that requires a valuation, but such valuation can vary from estate agent valuations to RICS valuations.

Pension reports are particularly important in cases where pensions are substantial, complex or unequal. Pensions can be one of the most valuable assets in a marriage and should not be overlooked.

The financial dispute resolution hearing

The financial dispute resolution hearing, known as the FDR, is often the most important hearing in financial remedy proceedings. The FDR is a settlement-focused hearing. The parties attend court with the aim of reaching agreement.

Before the FDR, each party usually files proposals setting out the financial outcome they seek. The judge considers the evidence and gives an indication of the likely outcome if the case were to proceed to a final hearing.

This indication is not binding, but it is often highly influential.

The FDR judge cannot usually hear the final hearing if the case does not settle and the final hearing judge will not know what the FDR indication was. This allows the parties to negotiate openly and realistically.

Many financial remedy cases settle at or shortly after the FDR.

What happens if the case settles?

If agreement is reached, the parties’ solicitors will usually draft a consent order.

The order may deal with:

• Sale or transfer of the family home
• Lump sum payments
• Division of savings
• Pension sharing
• Spousal maintenance
• Child-related financial arrangements
• Debt responsibility
• Clean break provisions

The order is then submitted to the court for approval. A judge will consider whether the agreement is fair. If approved, the order becomes legally binding.

What happens if the case does not settle?

If the case does not settle at the FDR, the court will list the matter for a final hearing.

Before the final hearing, the court usually requires:

• Updated financial disclosure
• Witness statements
• A schedule of assets
• Open proposals
• Chronologies
• Case summaries
• Costs estimates
• Expert reports that are still required or outstanding

At the final hearing, both parties may give evidence and be cross-examined. The judge will then decide what financial orders should be made.

A final hearing can be expensive, stressful and uncertain. For that reason, parties are usually encouraged to continue negotiating right up to the hearing.

How does the court decide a financial settlement?

The court’s powers are guided by section 25 of the Matrimonial Causes Act 1973.

The court must consider all the circumstances of the case, with first consideration given to the welfare of any minor child of the family.

The key factors include:

• The income, earning capacity, property and financial resources of each party
• The financial needs, obligations and responsibilities of each party
• The standard of living enjoyed during the marriage
• The age of each party
• The duration of the marriage
• Any physical or mental disability
• Contributions made by each party, including caring for children and homemaking
• Conduct, where it would be inequitable to disregard it. Most common poor conduct such as affairs do not meet the threshold of seriousness for it to be inequitable to disregard.
• The value of any benefit lost because of the divorce, such as pension rights

The court has a wide discretion. No two cases are identical.

Equality, needs and sharing

In many long marriages, equality is the starting point when dividing matrimonial assets. However, equality is not always the final answer.

The court will consider whether an equal division meets both parties’ needs. If one party has a greater housing or income need, particularly where children live primarily with that party, an unequal division may be justified.

The court may also distinguish between matrimonial and non-matrimonial property.

Matrimonial property usually includes assets built up during the marriage, such as the family home, savings, pensions and business interests developed during the relationship.

Non-matrimonial property may include assets owned before the marriage (more applicable the shorter the marriage), inheritances (more applicable the closer to separation), gifts or wealth generated after separation. However, non-matrimonial assets are not automatically excluded, especially where they are needed to meet housing or income needs.

The family home

The family home is often the most emotionally and financially significant asset.

The court may order:

• Sale of the property
• Transfer of ownership to one party
• Deferred sale
• Payment of a lump sum in return for one party retaining the property
• Division of sale proceeds

Where there are children, the court will consider their housing needs carefully. However, this does not mean the parent with care will automatically keep the family home permanently.

The outcome will depend on affordability, mortgage capacity, available assets and the overall fairness of the settlement. It is not unusual due to mortgage capacity and affordability that the only realistic option is the sale of the property. Afterall, the parties are no longer pooling resources which is often how the property was initially purchased.

Pensions

Pensions are frequently overlooked, but they can be extremely valuable.

The court may make a pension sharing order, which transfers a percentage of one party’s pension into a pension arrangement for the other party.

This can be particularly important where one spouse has built up significant pension provision while the other has taken time out of work to care for children.

Pension offsetting may also be considered. This involves one party retaining more of another asset, such as equity in the home, in exchange for giving up a claim against the other party’s pension.

Specialist pension advice is often required before agreeing a pension settlement.

Spousal maintenance

Spousal maintenance, also known as periodical payments, may be ordered where one party cannot meet their reasonable income needs from their own resources.

Maintenance may be ordered for a fixed term, jointly during both parties’ lives, or until further order.

The court will consider whether a clean break is possible. A clean break ends ongoing financial obligations between the parties, either immediately or after a defined period.

The modern approach is generally to encourage financial independence when fair and achievable. However, maintenance may still be appropriate where there is a significant income disparity, childcare responsibilities, disability, age-related factors or limited earning capacity.

Costs in financial remedy proceedings

Each party usually pays their own legal costs in financial remedy proceedings. However, the court can make costs orders in certain circumstances, particularly where one party has behaved unreasonably in the litigation.

Examples may include:

• Failure to provide proper disclosure
• Ignoring court orders
• Taking unrealistic positions
• Refusing to negotiate reasonably
• Causing unnecessary hearings
• Non-attendance at required appointments

Although the court has discretion to make a costs order, it is rare for the court to move away from the ‘no order as to costs’ principle. The above examples must be serious, so for example, a minor breach of a court order is unlikely to result in a costs order being made.

Costs can become significant, so early settlement should always be considered where appropriate.

How long do financial remedy proceedings take?

The timescale depends on the complexity of the case and the level of cooperation between the parties.

A straightforward case may conclude within several months.

More complex cases involving businesses, trusts, overseas assets, disputed pensions, high-value property or contested disclosure can take considerably longer. For example, form a to final hearing could take 12 – 18 months plus.

Delays may also arise where expert evidence is required or court availability is limited.

Can you settle after proceedings have started?

Yes. Settlement can happen at any stage.

Parties may reach agreement:

• Before form a is issued
• After form e disclosure
• At the FDA
• At the FDR
• After the FDR
• Shortly before the final hearing
• Even during the final hearing

The court process often helps settlement because it imposes structure, deadlines and disclosure obligations.

Why legal advice matters

Financial remedy proceedings can have long-term consequences for housing, pensions, income and financial security.

Early legal advice can help parties understand:

• What a fair settlement may look like
• What disclosure is required
• Whether expert evidence is needed
• How pensions should be treated
• Whether maintenance is appropriate
• Whether a clean break is achievable
• How to protect against future claims

A well-prepared case is more likely to settle on fair terms and avoid unnecessary costs.