Protect yourself in the future: The importance of consent ordersJuly 17, 2019
During divorce proceedings there will often be negotiations concerning a settlement in terms of assets, including property, pensions, savings and investments and income. A common mistake that parties make during this process is not to obtain a Consent Order. They sometimes consider that a verbal agreement or an agreement in writing is sufficient. This is not the case. Once an agreement has been reached, it is vitally important that it is drafted into a Consent Order. A Consent Order is important as once it has been approved by the court, it is binding upon the parties. This means that it is legally enforceable, if one party does not adhere to any of the terms.
The case of Wyatt v Vince is an example of the dangers of not having a Consent Order. The parties were married in 1981 and separated in 1984. The parties divorced in 1992 and neither had a great deal of money. Following the divorce the husband’s green energy business took off, which resulted in him becoming a multi-millionaire. In 2011 the wife brought a claim for financial remedy and despite various legal applications by the husband, the Supreme Court determined that the wife could bring a claim. The High Court ordered that the husband pay the wife a lump sum of £300,000. If there had been a Consent Order with clean break provisions, then the wife would have not been able to bring a claim. Therefore this error cost the husband £300,000.
In order to obtain a Consent Order, parties need to complete a document setting out the terms that need to be agreed between them. Once it is signed, it is then sent to the court with a Statement of Information, which provides the court with a snapshot of the parties’ financial positions. There is a fee of £50.00, which is normally shared between the parties. Upon receipt, the Consent Order will be placed before a judge and they will consider whether it is reasonable and fair. It is considered reasonable and fair, then the Consent Order will be approved.
It is very difficult for a party to be able to have a Consent Order set aside. In short, parties must show either misrepresentation, fraud, mistake, or non-disclosure. It is also therefore vitally important that if you are contemplating entering into a Consent Order that you seek legal advice as soon as possible. A poorly drafted Consent Order could result in the following difficulties: -
- Prejudicing your ability to enforce a Consent Order, if the other party has not complied with the terms; or
- Prejudicing your right to make claims in future.
If the parties are unable to reach an agreement, then a court order can be obtained by issuing financial remedy proceedings. This does not necessarily mean that an order will be imposed on them by the court. The parties are still encouraged by the Court to try and settle this matter and if they do so this will be by way of a Consent Order. The Court will only impose an order on the parties at a final hearing if there is no agreement although The Court can impose interim orders within proceedings.