MY DIVORCE - MY WEALTH - PART 2: Resolving HNW Financial Disputes in Relationships

Divorces involving high net worth individuals often bring complex financial disputes. While court proceedings are an option, they can be lengthy, costly, and emotionally draining. In England and Wales, Non-Court Dispute Resolution (NCDR) methods are increasingly popular for resolving such cases more amicably and efficiently. Some of the options available to the parties are:

Mediation

This involves a neutral third party, the mediator, who helps both parties reach a mutually acceptable agreement. Key benefits include:

• Confidentiality: Discussions remain private.

• Control: The parties retain decision-making power instead of relying on a judge.

• Cost-Effectiveness: Typically, the process is less expensive than litigation.

Mediators can guide discussions on asset division, property, business interests, and ongoing financial support.

Arbitration

In arbitration, a specially trained arbitrator acts as a private judge, making legally binding decisions. This process is particularly useful for:

• Complex financial arrangements (e.g., trust funds, international assets)

• A faster resolution, as arbitration avoids court delays.

Indeed, Arbitration offers flexibility in scheduling and ensures privacy. However, the process may incur significant costs, albeit they are likely to be less than formal court proceedings.

Private Financial Dispute Resolution (Private FDR)

This is a tailored version of a Financial Dispute Resolution hearing but conducted privately with a chosen specialist, such as a retired judge or senior barrister. Advantages include:

• Expertise from high-ranking legal professionals.

• A faster and more flexible process compared to formal court timelines.

However, the outcome of this process is not legally binding, so the parties would still need to apply to the Court for an Order encompassing the terms of any agreement they reach.

Do the parties have to attempt NCDR?

There have recently been some changes which impose a duty upon the Court to consider whether separating parties have engaged in NCDR prior to issuing court proceedings, or whether there is a justifiable reason for failing to do so.

Under the new rules, the Court has a duty to consider whether NCDR is suitable at every stage of a case. The rules further give the Court power to impose costs sanctions on a party that fails to engage in NCDR without a justifiable reason.

There are a limited number of exceptions to the rule, such as in cases involving domestic abuse. However, for most couples, attempting NCDR is a must.

Matthew Harcourt-Poole, Associate Family Solicitor
Lawson West Solicitors, Leicester

How can we help?

Our team of specialist family solicitors are adept at resolving matters without the need for court proceedings and have a wealth of knowledge about the alternative options available. For further information, or to make any enquiry, please Contact Us.

 

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