Court Error – When the sums don’t add up

It has today been announced by Her Majesty’s Court and Tribunal Service (HMCTS) that a mistake has been discovered within their online system which could potentially affect any financial settlements made between divorcing couples.

The error is contained within a form available online from HMCTS, which is used to calculate a parties’ current financial position known as ‘form E’. The form requires details of all assets and liabilities of each party to be listed and documentary evidence to be attached. The form also details each of the parties’ income, current and future expenditure together with any future capital needs.

There is a section of the form which automatically produces a total calculation by summarising the information contained earlier in the form. Reports from HMCTS today confirm the form is incorrectly calculating the total figure by failing to take into account the respective parties’ current liabilities. This clearly has the affect of a party appearing wealthier than they actually are, as their current liabilities have not been taken into account. If the parties have relied on the incorrect figures then this may have led to an unfair settlement being reached and if that is the case those cases may need to be reopened and settlements re negotiated. According to HMCTS the error has been occurring since April 2014.

It is usual for financial settlements between divorcing couples to be reached by each party exchanging full financial disclosure by way of completing a form E. It is only once each party has completed full financial disclosure and that information is exchanged that a clear judgement can be made as to the true financial position of each party. Based on that information the parties can then negotiate a settlement whether the negotiation is between the parties direct, between the parties’ solicitors, through mediation or through Court proceedings.

Due to the errors made within the HMCTS system there may be settlements which will need to be revisited and perhaps re negotiated. It is likely that if a party had legal representation, then those figures would have been double checked by the lawyer and so the likelihood of unfairness in the negotiations following an error in the form would be substantially reduced. If however the parties acted as litigants in person, i.e. with no legal representation then it is likely they would have relied on the online forms and the risk of the calculations being incorrect will be higher.

Parties are free to represent themselves and often do within divorce and financial proceedings. Whilst the divorce part of the process is often straight forward, it is highly advisable to seek legal representation in terms of the finances and this includes where the parties have minimal income or assets and wish to part on a clean break basis.

Our solicitors at Breeze and Wyles Ltd are experienced in divorce and financial matters and can offer advice on any aspect of a financial settlement including high net worth cases. One of our three family solicitors, Karen Johnson who is also a Director of the firm, is also a Family Mediator and a member of the Family Mediators Association (The FMA) an association with over 20 years’ experience of Family Mediation.

Lisa Honey is a family solicitor at Breeze and Wyles Ltd specialising in family law and deals with matters covering a range of issues including divorce and financial settlements, separation following the breakdown of a relationship, children matters and declarations of trust. Lisa is also an honorary solicitor providing advice at the Citizens Advice Bureau in Cheshunt.


‘Och Aye, the I do’

Alex Ferguson has revealed in his new book that Christiano Ronaldo will get married in Scotland if he ever gets wed.

Ronaldo’s skills on the pitch have lead to him earning huge amounts of money and it is suggested that his wish to protect his assets is what lies at the heart of his wish to tie the knot north of the border.

However, before Ronaldo decides to elope to Gretna Green we would suggest that he gets some legal advice first.

The law in Scotland on divorce is very different to the law in England. One reported difference is that the Scottish courts will only consider matrimonial property. That is property acquired by either or both parties during the marriage and before separation. The outcome being that assets held prior to the marriage or acquired after separation are not taken into account.

In England the courts retain more discretion in dealing with financial issues. Here the court must look at all the circumstances of the case including the needs of any minor child. The factors include the parties needs, incomes, earning capacities, resources, length of the marriage, standard of living, conduct and contributions along with consideration of any benefit which either party will lose as a result of the divorce.

Where assets have been acquired either prior to the marriage or post separation, the treatment of these will very much depend on the other circumstances of the case. For example, contributions and the source of the funds are more important in a long marriage than a short one.

The court is primarily concerned with sharing the matrimonial assets (ie those assets built up during the course of the marriage) and accordingly how funds have been utilised is likely to be relevant. Money invested in a matrimonial home in most cases is going to be considered a matrimonial asset regardless of where it originated from.

However, by far the biggest difficulty that may be faced when seeking to protect pre marital assets or assets acquired post separation is that ultimately those assets are a resource that is available to meet the parties needs. Depending on the life that the parties have become accustomed to and whether there are any children involved, those ‘needs’ could be interpreted very generously indeed.

Given the above, Ronaldo may well want to protect himself against the breakdown of any marriage. However getting married in Scotland simply isn’t enough. The reason for this is that it makes no difference at all where you get married. The financial claims that arise on divorce and the applicable law will depend upon where the divorce takes place. The test for which country has jurisdiction on divorce is predominantly based upon where the parties are usually resident. If neither Ronaldo nor his wife live in Scotland or consider themselves to be domiciled there then Scotland will not be an option for them for divorce.

The best way for Ronaldo to seek to protect his assets in the event he decides to settle down and live in England would be for him to enter into a pre nuptial settlement. Should he or any other footballer considering settling down require some effective nuptial planning to seek to protect their assets we would be happy to help.


Avoiding the worst sort of hangover from the Christmas party

‘Tis the season to be merry, so it’s time for the annual Christmas party; but for many employers it’s often more fraught than fun, as wherever and whenever the event takes place, it’s still an extension of the working environment. 

Whether the party is at a venue or informally in the office after hours, guidelines need to be in place and employers have a duty to safeguard staff welfare, so setting boundaries of what is acceptable behaviour, and highlighting that misconduct will result in the usual disciplinary procedures, needs to be set out before the event.

Alcohol consumption needs to be managed, as employees may become uninhibited after consuming too much alcohol.  Christmas party meltdown was behind a recent case that reached the Employment Appeal Tribunal (EAT), but another big issue for the employer in this case was that the two employees involved in a fracas were given apparently different treatment in the disciplinary procedures that followed.

The EAT decision in the case of MBNA Ltd v Jones involved an employee who was dismissed for punching a colleague at a work event, whereas the colleague was given only a final written warning for sending threatening texts to him after the work event had finished.

Said Maria Koureas-Jones, employment expert with Hertford solicitors Breeze & Wyles Solicitors Ltd: “Although the appeal found for the employers, saying they had acted reasonably in their decision to dismiss Mr Jones, despite the other employee receiving only a warning, the cost and disruption of protracted tribunal hearings is enough to remind companies of the importance of not taking short cuts where violence is involved and to make a thorough investigation.

“Any difference in treatment must be justifiable, have a clear distinction, and should take into account previous conduct and provocation.”

Another Christmas party risk, once tongues are loosened by drink, is sexual harassment and unwanted advances, which could make an employer liable for not providing adequate protection for an employee.  It’s another area that should be covered by a strong policy and clear attitude at management level.

And if there’s a zero tolerance policy towards alcohol in the workplace, managers need to give guidelines on what will be acceptable at the office party or other team get-togethers, particularly if it’s during the working day.

The party also brings in diversity issues, as the workforce may have different cultural or religious beliefs that affect their view on the Christian festival, and no one should be put under pressure to take part in Christmas-related events.

Added: “It may feel like party-pooping to send a set of instructions along with the invitation, but it’s the best way to avoid a lasting hangover that upsets everyone.  Some simple ways to keep things under control include reinforcing the message that it’s an extension of the workplace and that the standard of behaviour expected is just the same as at work.  It’s also worth making this a time to update staff on their equality obligations, to be sure they understand what could constitute harassment and making clear that it is unacceptable.

“It’s a safeguard for the company if you do such training and record that it’s taken place, alongside making sure your disciplinary policies are quite clear about what constitutes acceptable behaviour, and making sure they are applied consistently.”

ENDS

This is not legal advice; it is intended to provide information of general interest about current legal issues.

References: http://www.bailii.org/uk/cases/UKEAT/2015/0120_15_0109.html