People going through a divorce or separation often try and find an amicable agreement with their former spouse and partner regarding property, finances, and assets. Failing to do so in a reasonable manner can often lead both parties to pursue financial disputes against one another.
Such financial disputes, especially those arising from divorce or separation, can be complex and emotionally charged in what is already a difficult time for both parties. In any divorce or separation process, it can be challenging enough to make sense of your viable financial options and understand the next stops.
At George Ide LLP, we believe in resolving such disputes as amicably and efficiently as possible, and one crucial step before financial divorce settlements reach the courts is mediation. As experienced divorce and family law solicitors, we understand how difficult this type of situation can be for our clients and their families, and mediation can be much more preferable than taking disputes to court, both financially and emotionally.
This blog explores why mediation is essential in difficult circumstances like divorce and how it benefits all parties involved.
Understanding Mediation
Finance, divorce and property mediation involves a neutral third party, the mediator, who assists disputing parties in negotiating a mutually acceptable agreement.
It can be used to address a wide range of family issues, such as dividing property, assets, and savings after a divorce, arranging child support, spousal maintenance agreements, pensions, and determining how to deal with liabilities and debts.
Unlike court proceedings, financial mediation is informal, flexible, and confidential. The mediator does not impose a decision but helps facilitate communication and understanding, allowing parties to reach their own agreement.
The Legal Requirement for Mediation
In many cases, mediation is a legal prerequisite before initiating court proceedings for financial disputes. The first step is usually to attend a Mediation Information and Assessment Meeting (MIAM) to determine whether mediation is suitable, with a certificate proving that both parties have attempted mediation.
Financial mediation agreements can be legally binding, depending on the formalities and type of agreement. For instance, if both parties in a divorce reach an agreement on financial matters, that agreement can be formalised in a legally binding document. However, if a mediation agreement isn’t formalised into a consent order (i.e. approved by the courts), it may not be legally binding. This is why it’s important to consult with professional family law and divorce solicitors to guide you, while asking mediators any questions about how to make financial agreements legal.
In many cases, mediation helps those going through a divorce or separation avoid making hasty decisions regarding the disbursement of property, assets, finances, and savings through the courts.
Benefits of Mediation
- Cost-effective: Mediation is typically much less expensive than going to court. While mediation costs can vary depending on the number and complexity of sessions, legal fees can quickly escalate in court cases, whereas mediation costs are generally shared between the parties.
- Time-saving: Court cases can be lengthy, often taking months or even years to resolve. Mediation sessions can be scheduled quickly, and resolutions can often be reached within a few sessions, saving valuable time for everyone involved.
- Confidentiality: Unlike court proceedings, which involve multiple other third parties, mediation is a private process. This confidentiality can be crucial for parties who wish to keep their financial matters and personal disputes out of the public eye.
- Control and flexibility: Mediation allows parties to retain control over the outcome. In court, a judge imposes a decision, but in mediation, the parties work collaboratively to reach an agreement that suits both sides. This flexibility often results in more satisfactory and amicable solutions.
- Reduced conflict: The sometimes hostile nature of court proceedings can exacerbate conflict and harm relationships. Mediation encourages cooperation and communication, which can help preserve relationships, particularly important when children or ongoing interactions are involved.
When Mediation is Not Suitable
While mediation is beneficial in most cases, it may not be appropriate in all situations. For instance, if there is a history of domestic abuse or unfaithfulness between the parties, mediation may not be effective or safe.
In such cases, alternative legal proceedings should be pursued. It’s always prudent to understand your legal rights, which is why pursuing legal advice from an accredited family lawyer will help you understand the legal implications of any proposed mediation sessions, agreements, and disputes.
The Mediation Process
- Initial assessment: The process typically begins with a MIAM, where a mediator assesses whether mediation is suitable for the parties involved. This is so that they can consider all ways to sort their finances without court involvement and find out how mediation may work for their unique situation.
- Mediation sessions: If both parties agree to proceed, mediation sessions are scheduled. Financial information about income, properties, savings, and investments is disclosed, as well as debts, pensions, expenses, and more. Sessions can either take place in person or online, offering convenience, accessibility, and affordability. The mediator will ensure that both parties can disclose views, priorities, and concerns, and help explore various options to resolve financial issues.
- Reaching an agreement: The goal of mediation is to reach a mutually acceptable agreement. Once an agreement is reached, it can be formalised in a written document. Although not legally binding, this agreement can be made into a consent order, which is enforceable by the court.
Speak to a Family Law Solicitor to Explore Your Options
In summary, mediation offers a valuable alternative to court proceedings for resolving financial disputes. It is cost-effective, time-saving, confidential, and allows parties to maintain more control over the outcome.
At George Ide LLP, we advocate for mediation as a crucial step in the dispute resolution process, helping clients navigate their financial disputes with minimal conflict and maximum efficiency.
If you are facing an imminent financial dispute, it’s important to understand your legal rights and obligations. Contact us today to learn more about how you can understand your financial position before going to court.
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For general enquiries or to discuss more specific needs in personal or commercial law please get in touch with a friendly member of our team today.
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