Many divorcing couples are able to reach an agreement about how they will split their assets or on arrangements for their children. This is often a positive thing, as it avoids the need for expensive and stressful Court hearings. Despite this, however carefully your agreement is drafted it is not legally binding until set out in a consent order. Without being formalised in a consent order, a private agreement is not bound by the Court and either spouse is free, even after the divorce has been finalised, to file an application at the Court making a financial claim against the other.
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Protect yourself against a future change in circumstances
Of course, you may be on good terms with your ex and you may trust them enough that the agreement you make between you will be adhered to by you both. You might think a consent order is not necessary.
However, there is a risk in every circumstance that one party’s financial situation may change in the future and lead to a claim being made by the other spouse – regardless of the agreement you reached between you.
For example, one party may receive an inheritance or win the lottery. Or, one party could become ill and is unable to work.
A 2015 Supreme Court case featuring Dale Vince and Kathleen Wyatt highlighted this potential issue. The couple, who had almost no assets, divorced without a consent order being approved. Thirty years later, the Supreme Court allowed Ms Wyatt to make a financial claim against her ex-husband who had since built up a multimillion pound sustainable energy business.
This is an extreme case, but it highlights the fact that, if no order has been made, then either party can go to Court and make a financial claim against the other – even if it is years since the divorce took place.
The only exception to this is where one party has remarried. Note that if you remarry then this prohibits you from making a financial claim, but it will not bar your ex from making a financial claim on you if they have not remarried.
What a consent order does is to ensure the settlement you agree is final and enforceable. It also means you protect each other against any unforeseeable circumstances. While it may be unlikely that either of you will become a multimillionaire, it shows that pensions, savings and equity in property could become vulnerable to a claim by a former spouse if you do not formalise your arrangements at the point of divorce.
It should be noted that if your ex-spouse does make a claim in the future in the absence of a consent order, it is not guaranteed that this claim will be successful.
The Court will consider a range of factors including:
- How long you have been separated
- The financial position of both parties when you separated/divorced
- The financial position of both parties at the time the application is made.
Ensure you can enforce the agreement you made
The other reason for formalising your agreement in a consent order is that, if one party does not keep to the terms of the settlement, the other party can ask the Court to take steps to enforce the agreement.
The Court can only take enforcement action if the settlement has been incorporated into a consent order. This involves an order being:
- Drafted and agreed by both parties
- Signed by both parties
- Filed at the Court with supporting documentation (and a small fee being paid)
- Considered by the Court
- Approved and sealed by the Court
At this point the consent order is legally binding, and so if a party breaks the order you can apply to the Court for it to be enforced.
A breach of a consent order is effectively a breach of a Court order, and this is something that the Court will look very unfavourably upon. Unless there is a good reason for breaking the agreement, your ex-spouse would be liable to fulfil his or her responsibilities immediately.
In most cases, the party who breached the order will be required to fulfil the order (for example, make a lump sum payment, dispose of an asset to split the proceeds, maintain child maintenance payments etc.) within a certain period of time.
If he or she fails to do so, the Court order will be broken, which is punishable by a fine or even prison.
Remember that without a consent order, your agreement won’t be legally binding. So, if your ex goes back on their word in the future, for whatever reason, the Court is unable to enforce your private agreement and it may cost you a lot of money to rectify the situation.
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The information on this website is to be considered a guide and is therefore not legal advice. You use this information with the understanding that Wiselaw does not accept liability for any direct or indirect losses as a result of anyone relying on or acting upon the information on this website. Whilst we endeavour to provide accurate information, Wiselaw does not accept liability for any errors or omissions on this website.