Why a consent order is important
Since April 2022, the no-fault divorce process has meant that getting divorced is relatively straightforward. Although you and your spouse are under no obligation to divide your respective finances between you, not doing so leaves you open to the risk of potential future claims and the possibility of contested court proceedings.
The only way to achieve finality and security in respect of your finances is by the court sealing what is known as a financial remedy order (FRO) or a “consent order”. This order sets out the terms upon which all of the matrimonial assets are to be divided between you and your spouse, and otherwise provides for all other claims you may have against each other to be dismissed, commonly known as a ‘clean break’ Additional information on the clean break principle is set out at: Financial freedom after divorce: Understanding the clean break order.
Reaching a financial agreement
Although a court can impose a financial settlement by way of an FRO following a final hearing in contested matrimonial finance proceedings, in the majority of cases, settlement is achieved between the parties either within, or outside, court proceedings.
When an agreement is reached, regardless of whether this is at court, through negotiations between lawyers or other forms of non-court dispute resolution (see Out of court and into resolution: Methods of non-court dispute resolution on separation or divorce), or agreed between you and your spouse directly, the only way to make the terms of the agreement binding is by submitting an FRO to the court for consideration. An FRO may only be submitted to the court once the conditional order of divorce has been pronounced, which is a minimum of 20 weeks after the divorce application has been filed.
When does an agreement become legally binding?
It is important to remember that until an FRO has been sealed by the court, any agreed terms are not automatically binding. For example, an agreement reached in mediation can be disregarded unless it is formalised into an FRO. Any other form of ‘settlement agreement’, even if signed and executed as a deed, is not binding.
Preparing the financial remedy order
The process for submitting an FRO is the same however the agreement was reached. First, the agreed terms are recorded in a draft version of the FRO, which is usually prepared by lawyers instructed by one spouse and agreed with the other spouse / their lawyers. It is not essential for both of you to have lawyers, but it is usually helpful for a lawyer to at least draft the FRO.
Completing Form D81
You and your spouse must also complete, either together or separately, a document called a Form D81, or statement of information for a consent order. The D81 consists principally of several tables in which both you and your spouse record all your current assets, liabilities and income as they stand prior to the proposed FRO being made, and any changes that will occur after the FRO is put into effect. For example, if the agreed FRO provides for a particular asset to be transferred from your spouse to you, its value will be recorded in the column recording your spouse’s assets prior to the FRO being made, and in the column which shows your assets after the FRO is approved and put into effect.
Pension sharing and Form P1
If the agreement provides for pensions to be shared between you and your spouse, you must also complete an additional document in respect of each pension being shared, called a pension sharing annex, or Form P1. For more information on dividing pensions upon divorce, please see: Dividing pensions fairly: what you need to know in divorce | Porter Dodson LLP.
Submitting the documents to court
Once the draft FRO, D81(s) and any pension sharing annex(es) have been agreed and signed by you and your spouse and, provided the conditional order of divorce has been pronounced, these documents are then submitted to the court for consideration by a Judge. There is a court fee payable, which is currently £62.
How does the court assess a consent order?
The Judge will read through these documents and apply the various factors set out in the Matrimonial Causes Act 1973, but most significantly, consider whether they believe the terms of the proposed consent order are fair, and meet the needs of both you and your spouse and any children, before either approving or rejecting the FRO.
What happens if the order is approved or rejected?
If the Judge approves the FRO, the court’s seal will be added to the document, at which point it is legally binding and its terms come into effect. If an FRO is rejected, a Judge may seek further clarification or comment upon the reason(s) why, although they are not obliged to do so. Further consideration will then need to be given as to why the FRO was rejected and what needs to change for a Judge to approve it. The court will not make any changes to a FRO, or propose an alternative agreement.
The only exception to the above process is if an agreement is reached at court and approved by the Judge, most likely where the parties are attending a financial dispute resolution hearing. In that case, the need for a D81 may be dispensed with and if the FRO itself is drafted and approved on the day, a further application will not be necessary.
Why it is important to seek legal advice
If you and your spouse have reached an agreement between yourselves, it is almost always sensible to take independent legal advice at that stage. This is both so that a lawyer can indicate whether they believe the terms agreed are fair and a Judge is likely to approve an FRO in those terms, and also to assist with drafting the FRO and D81 themselves.
How we can help
If you require any assistance in relation to reaching an agreement with your spouse, or preparing the documents required to apply for a FRO, our specialist family lawyers will be happy to assist you. Get in touch to discuss your situation.
