Couples’ finances “at risk” due to no-fault divorces

Analysis shows decline in financial order applications, despite record divorce applications

Family court statistics released earlier this year by the Ministry of Justice (MoJ) have shown that 31% fewer financial order applications have been made, despite the rise in divorce applications.

Family court statistics from April to June 2022 show that there has been a dramatic rise in divorce petitions, with 33,234 being made since no-fault divorce was introduced – the highest quarterly figure in 10 years.

However, analysis from Woolley and Co. Solicitors announced surprising revelations surrounding financial protection. During the second quarter of 2022, just 9,235 financial remedy applications were made. In the same quarter in 2021, 13,404 applications were made, which shows a significant 31% decrease compared to a year ago.

They claim this could indicate that many divorcing couples may be misunderstanding the necessity to protect their financial position, even during an amicable divorce. Woolley and Co. Solicitors claim this could place assets at risk without financial orders in place.

When getting divorced, couples have the opportunity to apply for a financial order, a legal document that outlines a financial agreement between the divorcing parties. It’s commonplace for a financial order to include a clean break clause, meaning that the ex spouses are not permitted to raise financial claims against one another in the future.

The absence of a financial order, and a clean break clause, puts individuals at risk of financial issues and disputes. Without financial remedies there is nothing preventing either spouse from making a claim against assets from their ex-partner at a future date or requesting financial support.

No-fault divorce was intended to provide divorcing couples with a more amicable divorce process, through removing the need for blame and allowing for joint applications. However, the 31% decrease in financial remedy applications since Q2 last year suggests that allowing couples to choose more amicable processes may be encouraging couples to start legal processes without first taking legal advice.

Analysis from Woolley and Co. claims individuals and couples may have mistakenly assumed that getting a divorce under the new rules means that their finances are protected. They state it remains incredibly important that those who are applying for a divorce also apply for a financial order as the process is necessary to legally establish entitlement to property, assets, and savings, and to sever any financial ties between the divorcing parties.

Andrew Woolley, Founder and Senior Partner at Woolley & Co. Solicitors, stated his concerns regarding the figures as he said:

“We always knew the new no-fault divorce laws would change the landscape of UK divorce, but we did not anticipate such dramatic figures so soon after the fact. It’s concerning to see the apparent fall in the number of couples protecting their finances when they divorce. It suggests many UK citizens may be misinformed about how protected they are under the new divorce laws, and are becoming complacent because of it.

Couples who are making joint divorce applications must be aware that they do not offer automatic financial protection nor guarantee the absence of financial disputes. Divorcing couples and those dissolving civil partnerships should always seek advice about their financial rights and take the necessary precautions to protect their financial position for the future.”