A Quick Guide to Financial Proceedings in England/Wales and Scotland
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Fiona Turner, Partner at Weightmans LLP- 0
- 6 minutes read
This article has been written by Fiona Turner a Family Law Partner in Weightmans’ English Offices and Noel Ferry a Family Law Partner in Weightmans’ Scottish Office.
Following the Villiers decision, reinvigorating forum shopping (Villiers v Villiers [2020] UKSC 30), and with the implications of Brexit now a reality, family law practitioners must ensure that they are aware of the significant differences in family law between England/Wales and Scotland.
This article identifies some of the differences between the two jurisdictions when considering a financial settlement on divorce or dissolution.
Financial Settlements arising on Divorce/Dissolution
England and Wales
In England and Wales, all resources held by the parties, whether in their joint or sole names, or whether held with third parties, worldwide, are assessed when ascertaining the terms of a reasonable and fair financial settlement.
The court will consider which assets constitute ‘matrimonial property’ acquired during the marriage, and consider assets acquired both before the marriage/relationship and those acquired post separation.
All are available for consideration when ascertaining the terms of an appropriate financial settlement.
Scotland
In Scotland, there are key differences.
The matrimonial property available for a fair financial settlement is limited to those resources acquired by the parties during the course of the marriage up to the date that they separate. For example, if a party won the lottery, or received a significant inheritance, the week after separation the other spouse would not have any entitlement to a share of the same on divorce.
Any gifts or inherited assets are not considered matrimonial property if they remain in the same format as received, and have not been sold or converted into new assets during the marriage. They would effectively continue to belong to the party who received them.
Any assets acquired before the marriage would not be considered matrimonial property and again would continue to belong to the party who acquired them.
There is an exception to this last rule in that any property or its contents acquired before the marriage which the parties use as a family home would be deemed to be matrimonial property and available for division on divorce.
Entitlement to a Fair Share
In both jurisdictions, any division must be fair and reasonable having regard to the parties’ respective resources.
The court in England/Wales and Scotland will consider whether an equal division is appropriate, or whether it is fair in that case to depart from equality.
Each jurisdiction will apply its own case law and legislation, which we do not examine here.
Maintenance/Periodical allowance
In both jurisdictions, if one party is going to be in a position of financial need they can also apply for spousal maintenance/aliment. Maintenance after divorce in Scotland is called periodical allowance.
This may be assessed as giving financial support to allow one party who may have been financially dependent on the other sufficient time to adjust to the separation. During that time they might be expected to retrain or try and find employment etc. Or it may be they have young children to care for and will need some time to get back to employment.
Duration of payments
However a key difference between England and Wales, and Scotland, is the duration of maintenance payments.
In Scotland, this is normally limited to no more than 3 years of payments. In rare cases where there is likely to be severe hardship this can be paid until death or remarriage. An example of this might be where one party cannot work due to longstanding illness.
In England and Wales, the court has a wider discretion to assess the duration of payments.
Procedure
In both jurisdictions, most couples try to negotiate an amicable separation agreement based on the above principles to deal with their finances rather than going to Court.
England
In England, parties are always advised to seek a court order to record the settlement that has been negotiated.
On marriage, and divorce, the law provides both parties with a wide range of obligations and financial responsibilities towards their spouse, or former spouse. Unless those obligations are formally dismissed, and so brought to an end, by a court order, they are still potentially available for the other party to make a claim against in the future. If a party inherited a significant sum, or won the lottery for example, or if circumstances change such that they or their spouse need the support of the other, in England/Wales they could be at risk of a claim, even if a divorce was finalised several years ago as we know from the Supreme Court case of Wyatt v Vince ([2015] UKSC 14).
As such, it is important to obtain a properly drafted court order to dismiss the risk of a former spouse making a claim in the future.
Scotland
Unlike England, such an agreement does not have to be approved by the Court in Scotland. Once such an agreement is negotiated, agreed and signed it is effectively a contract between the parties. It can be registered to become binding and enforceable in the same way a court order would, but the court will not scrutinise it.
Once an agreement has been concluded the parties need only ask for a straightforward divorce at some point later when it suits them. The parties generally agree that the action will be undefended so it can proceed quickly. Neither party has to attend court.
If the parties have no children under 16 they can apply for the even quicker and cheaper simplified divorce provided at least one year has elapsed since separation.
Contested Proceedings
In both jurisdictions, it is only if parties cannot reach an amicable agreement that they will need to apply to a court to ask a judge to decide the matter.
We can provide specialised advice in both England/Wales and Scotland, and can assist in any cross border family cases which span both jurisdictions.
