Why a Financial Court Order is Needed After a “No Fault” Divorce

By Karen Pritchard

Principal Associate

Ever since the arrival of “no fault” divorce, we have seen an increase in enquiries from individuals that are under the misapprehension that they do not need to do anything about their financial settlement.

Whilst the introduction of “no fault” divorce is a welcome development, having brought an end to the necessity to the requirement for couples to blame the marriage breakdown on one party’s adultery or behaviour (or otherwise to have been separated for at least 2 years), it is still important that the financial settlement is properly documented into a court order.

Without a Court Order, the agreement is not binding and either party could make an application to the Court for “financial remedies” (which can include maintenance, transfer of properties, lump sums and pension transfers) at a later date, even years later. By that point, one party’s financial position could have significantly improved and their ex-spouse could be entitled to a share of their assets at that point, irrespective of what was previously agreed.

A case that was heard by the Supreme Court in 2015 showed how risky the lack of a court order can be. Mrs Wyatt and Mr Vince married in 1981, separated in 1984, and divorced “at some point in the 1990s”. They had one child, who was born in 1979. There was no evidence that a financial settlement had been reached following the breakdown of the marriage.

During the marriage, Mrs Wyatt and Mr Vince had very limited financial resources, but following the divorce, Mr Vince had started a green electricity supply business which at the time of the hearing was worth £57 million.

In 2011, Mrs Wyatt made an application to the Court for financial remedies. The Supreme Court found that, in spite of the amount of time that had passed, Mrs Wyatt was still entitled to make a financial claim against her former husband, as no Court Order setting out a financial settlement had ever been made. The Supreme Court did not decide what Mrs Wyatt should receive (the application was just to determine if she could make a claim in the first place), but the parties eventually agreed between themselves that Mrs Wyatt should receive a lump sum payment of £300,000 plus the amount that Mr Vince had already paid towards her legal fees (£325,000).

While a payment of £300,000 may seem an insignificant sum against Mr Vince’s large wealth, this case serves as a cautionary tale to ensure that a court order that documents a financial agreement is obtained following a divorce.

Without the finality of a court order, the agreement is not binding, and either party can look for a share of the other’s assets and/or income in future.

For more information and to find out how we can help you, please contact us on 0345 646 0406 or fill in our online enquiry form and a member of our Team will be in touch.