As we have discussed in other articles, whilst getting a divorce may legally end a marriage, it does not automatically sever financial ties between a divorcing couple. In England and Wales, even after a divorce is complete, unless and until a spouse remarries, he or she can still bring a financial claim against their former spouse, potentially many years after the divorce has been finalised. To avoid future potential claims, a financial settlement must be reached and enshrined in an Order of the Court.
Richard Rodway and Julia Drury, partners in our Divorce and Family Law team, discuss what is meant by two common orders often referred to regarding finances: a Consent Order and a Clean Break Order.
What is a Consent Order in Divorce?
If a divorcing couple can reach an agreement on the division of their assets, money and financial provision, they can ask the Court to make a Consent Order, enshrining that agreement. This will be dealt with as a paper or online process, and it is very unlikely that anyone will need to attend Court.
If an agreement cannot be reached, then either party can apply to the Court to have the Court decide upon the terms of and impose a settlement on the parties. This application for a “Financial Remedy” can take several months and a minimum of 2 Court hearings, but it is open to the parties to settle and agree to the terms of a Consent Order at any point.
Where a divorcing couple can agree the terms of a financial settlement, they can be more creative as to the terms of the settlement and Court Order. The Court will not approve and make a Consent Order on the agreed terms if it does not consider the Order is fair. Left to its own devices, the Court is more limited in terms of what it can Order and impose upon the parties, but Consent Orders can cover:
- Sale of properties and division of sale proceeds
- Transfer of properties/assets from one party to the other, or from joint names to sole name
- Pension Sharing / Pension Attachment / Pension Earmarking Orders
- Lump sum payments
- Spousal maintenance
- Child maintenance (in certain limited and prescribed circumstances given that jurisdiction for child maintenance ordinarily rests with the Child Maintenance Service)
- Division of contents (including pets) – although it is more preferable and normal for the parties to agree division given that it is normally disproportionate to have the Court adjudicate
A Consent Order gives each party the security and certainty of knowing that any financial agreement reached will be binding and enforceable after the divorce.
What is a Clean Break order?
While a Consent Order is the overall court-approved document recording a financial agreement, a Clean Break Order is a specific clause inside it to stop any future financial claims. Only a Consent Order, incorporating clean break clause(s), will end financial ties completely.
A Consent Order sets out who keeps what, whether any lump sum will be paid, and what happens to property, pensions, or savings, etc. A Clean Break Order ensures that no financial claims can be made in future for income, capital and/or pensions, including claims against the other’s estate in the event of death, even if the financial circumstances of one party dramatically change for the better, such as receiving a large inheritance, winning the lottery, or doing well in business.
If a Consent Order includes ongoing financial commitments, such as spousal maintenance, the Order can include a deferment of the Clean Break (for the recipient of those ongoing commitments at least) until an agreed point in the future, e.g. the end of the maintenance term. A Clean Break Order does not, however, stop or replace the legal duty to pay child maintenance.
A Clean Break Order is often appropriate where both parties can leave the marriage on a financially independent footing, such as couples without children or those with a similar earning capacity.
It is advised that even if the parties do not have any finances to sort out, or are not transferring any assets to one another, they should still obtain a Clean Break Order to ensure that any future claims against one another are dismissed.
How long does it take to obtain a Consent Order?
A Consent Order (whether it includes a Clean Break Order or not) can only be obtained by parties within divorce proceedings. The parties must be at the Conditional Order stage in the divorce before a Consent Order can be submitted to the Court for approval.
A divorcing couple need to apply to the Court for a Conditional Order, formally known as a Decree Nisi, which is a formal document asking the Court to confirm that it sees no legal reason why a couple cannot divorce, as they have met all the legal requirements. A Conditional Order can be applied for 20 weeks after an initial divorce application and typically takes 4 weeks to be approved.
Once this stage is complete, a divorcing couple can ask the Court to make a Consent Order on the terms they have agreed between them.
The judge will be presented with a brief resume of the parties’ finances so they can exercise their discretion as to whether to approve the settlement. It may not be what the judge would have done if they had been left to their own devices, but if the agreement seems not unfair, they will approve the Consent Order and make an order in those agreed terms.
So, potentially, this is six months down the line from when divorce proceedings were initiated, provided that during that time negotiations and discussions have played out well between the parties. But of course, the parties involved may resolve their discussion regarding the division of their finances within a matter of weeks whilst they are waiting for the divorce to catch up to the Conditional Order stage. Similarly, negotiations can in some cases be protracted if there is an impasse for whatever reason, and Court proceedings could ultimately end up with a trial, with a judge making a decision. If this is the case, the process could easily take 18 months/two years, or even longer.
Given the length of time Court proceedings to resolve financial matters can take, and how much it can cost as a result, it is far better for people to take good legal advice early on so parties can have informed discussions sooner rather than later, and hopefully obtain an Order cost-effectively, reasonably swiftly and by agreement.
Legal help for Consent Orders and Clean Break Order in Divorce
The Family & Divorce team at THP Solicitors have extensive experience in dealing with the financial consequences of divorce, can help you with the protection and distribution of jointly owned assets, and adopt a realistic approach to achieve a speedy and cost-effective resolution of financial issues.
For a confidential discussion about the divorce procedure and financial settlements, please get in touch with Richard Rodway in our Henley office or Julia Drury in our Reading office, both of whom will be happy to have an initial conversation about the best divorce route for you.
To speak to one of our family law solicitors, please contact:
- Julia Drury on 0118 975 6622 (Lower Earley office)
- Richard Rodway on 01491 570 900 (Henley-on-Thames office)
You can also email us confidentially at office@thpsolicitors.co.uk.