Rising costs of divorce encourage couples to ‘nest’ together

Splitting couples are facing a further rise in the cost of divorce with a big increase in court fees, and many are facing up to the challenge of asset-sharing and high property prices by turning to novel solutions to deal with the change.

One of the new approaches to parenting after divorce is what’s being called the bird’s nest approach, a shared custody arrangement where the children stay at home and parents move around them, as depicted recently by TV programmes The Affair and Transparent.

The emphasis in bird’s nesting is on parents doing the moving, and taking the inconvenience, rather than expecting children to do so.  Parents benefit by needing to have only one property large enough for the whole family.  The arrangements are often developed through mediation and are being supported by the Family Courts, reflecting the general shift in attitude away from sole custody to shared parenting.

Whether or not couples opt for family-friendly practices such as bird’s nesting, they will still be affected by the recent jump in the cost of applying to the courts for a divorce. The 34% rise from £410 to £550 has been introduced by the Ministry of Justice to help pay for the overall cost of administering justice.  And while many family lawyers have complained that the rise is unjustified, it’s just one of a series of changes that are pushing up the cost of getting divorced.

Director, Collaborative Lawyer and Family Law Arbitrator Olive McCarthy MCIarb of Hertford based solicitors Breeze & Wyles Solicitors Ltd explained: “This is a big jump in the cost of going to court for a divorce. That may be manageable for the majority of couples, but what is less easy to control is overall costs.  We’ve seen big cuts in legal aid for divorcing couples, and as a result some are trying to manage their own route through the courts, which they may find to be a major challenge.  Others may find it difficult to contain overall costs if an ex-spouse is set on fighting, rather than agreeing.  Obviously, the aim should be a fair and reasonable outcome and that usually involves finding some middle ground.”

“That’s where mediation can make a big difference,” she added. “Putting children first is the most important thing for any couple.  What is most important is being open to collaborative mediation, as that can help bring a couple together to achieve a positive outcome for everyone, through negotiation.”

In recent years, some divorcing couples have used up the bulk, or even all, of the assets under dispute due to the costs involved in their court battles. For example, in the case of Piglowska v Piglowski, the couple spent more than £128,000 fighting over a joint asset pot of £127,400; or the 2008 case of KSO v MJO & Ors, where costs consumed assets worth more than £800,000, forcing the husband to declare himself bankrupt.  In a more recent 2014 case, a couple spent nearly £1m fighting their case, representing almost a third of their joint assets of £3m, accumulated over an 18-year marriage.

The UK may also find itself following another US-led trend towards loan-funded divorce. Specialist lenders are increasingly being used to fund divorce proceedings, where one or both of the divorcing couple cannot realise assets to pay for the legal costs.  In the UK, some firms have already moved into the market, with lending currently being offered for up to around one third of the expected divorce settlement.

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

Divorce Court fees to rise Monday 21st March 2016

From Monday 21st March 2016 the Court fee for divorce cases will rise from £410.00 to £550.00. What does this mean for individuals? For couples who have already received confirmation from the Court that their divorce petition has been issued, the increase should have no effect as the lower fee of £410.00 would have already been paid. However any party wishing to issue divorce proceedings from 21st March 2016 onwards will need to pay the increased Court fee of £550.00, an increase of £140.00. The proposals were first proposed in July 2015 but no date was set for the increase to take effect. However, Law firms began receiving correspondence over the last week advising that the increase will take effect from next Monday which leaves little time to notify clients. Although there is a possibility of applying for the fee to be waived if the applicant is on a low income, there is a concern that the increase in fees will result in the process of divorce becoming unaffordable to many.

At Breeze and Wyles we offer a fixed fee divorce package at a cost of £499.99 inclusive of VAT plus the Court fee of £550.00. Our service enables you to be fully represented by a qualified specialist lawyer throughout your straightforward undefended divorce for a one-off fixed fee payment. Our experienced family lawyers will fully explain the divorce process to you and deal with any concerns or queries you may have. They will take responsibility for the preparation of all relevant forms and will deal with the Court on your behalf throughout the entire matter.

Breeze and Wyles are also able to offer expert advice in respect of all issues surrounding divorce or a relationship break up such as advice on financial settlements as well as matters relating to children.

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.    

Website: www.firstfordivorce.co.uk

Email: lisa.honey@breezeandwyles.co.uk

Tel: 01992 558 411

Companies countdown to new transparency regulations

Companies are on a countdown to comply with new regulations around transparency of ownership. As part of the Small Business, Enterprise and Employment Act 2015, unlisted UK companies and LLPs will have to identify those people with significant control over them, and to record their details in a new statutory register.

The information must be prepared by 6th April 2016 and then filed on the public register with Companies House from June 2016, as part of the new confirmation process that replaces the annual return.

The aim of the so-called PSC regime – the acronym refers to ‘people with significant control’ – is to make it easier to find out who is controlling a company and so cut corporate crime. It’s part of a global initiative to tackle misuse of company structures, and will also tie in with the EU’s Fourth Money Laundering Directive requirements, which requires member states to hold a central register showing corporate beneficial ownership.

The PSC register will contain information on individuals who ultimately own or control more than 25% of a company’s shares or voting rights, or who otherwise exercise control over the company and its management. In certain circumstances, it can apply where a trust or firm would satisfy the criteria if it were an individual.

And although compliance will be fairly straightforward for those companies who have simple ownership and control structures, it is more challenging for those with more complex ownership structures, especially if trusts, partnerships or overseas companies are involved.

Said company law specialist, Donna Bromyard, Solicitor of Hertford-based solicitors Breeze & Wyles Solicitors Ltd.:   “The guidelines and regulations are still in draft form and further detail on implementation is awaited, but the deadline dates are in place and companies need to be focused on working towards 6th April.

“The task of identifying which individuals should be disclosed is complex and most companies are going to need support to be sure they’ve identified their PSCs and prepared the Register correctly, at least first-time round.”

She added: “Companies are used to providing a register of shareholders, but in many cases this new PSC register will look quite different.”

The requirement of the Register of People with Significant Control Regulations 2016 to maintain a PSC register will apply to all UK private and public companies, other than those publicly traded companies which already report under DTR 5.

The Register must be maintained at the company’s registered office and will be available for public inspection and searchable online via Companies House, although certain personal information that must be provided to Companies House will be suppressed in the public version of the register, for example residential addresses.

Failure to comply will be a criminal act with the possibility of a prison sentence and it’s not enough for companies to say they’re not sure who has the controlling interest, or to have a blank register, as they must take ‘reasonable steps’ to identify and list them. If a company is unable to identify who has control of, say, a holding company, this must be stated in the register.

Web site content note: 

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