There is a huge misconception that in divorces where the separating couple is wealthy, the legal costs associated with the divorce will inevitably be high.
Understandably, if the asset structure is complex, more work may be involved in assessing a couple’s wealth and looking at potential options for settlement. However, the simple value of the assets should not determine the extent of the legal fees or create a presumption of complexity.
In my opinion, too many high net worth, wealthy divorces are unnecessarily litigated through the family courts. More cases should be capable of being resolved through dispute resolution processes including mediation, collaborative law, arbitration and private FDRs.
The case below is a classic example of a high net worth divorce which was settled outside of court within a non-court dispute resolution process, saving considerable legal fees for both parties.
Mr and Mrs S*
I acted for the husband (H) going through a divorce and financial separation. He and his wife (W) were on good terms and wanted to come to a financial settlement without going to court. On my advice, he attended family mediation.
H ran a construction company which had been valued by his accountant at £1m after tax. This was the main asset of the marriage. The parties also had some equity in the family home and pensions. H put forward a proposal to W as to how to divide their wealth between them, whilst also enabling H to retain his business.
W wanted to mediate with H but also wanted the benefit of legal and financial advice. It was therefore agreed that the parties’ lawyers would be involved in the mediation together with a forensic accountant, financial adviser and chartered surveyor. This is known as hybrid mediation.
With the help of a neutral forensic accountant and surveyor, W was able to sense check H’s business valuation to give her the confidence that the value of the business and its property had been properly assessed. Through the support of a financial adviser, W could reality test H’s proposals to ensure they would appropriately meet her needs now and in the future.
Having undertaken a ‘sense checking’ exercise with the experts and with the support of lawyers and a mediator, H and W were able to agree a final financial settlement between them at a final meeting with their solicitors around a table.
In this case both the parties and their lawyers were willing to be collaborative, creative and pragmatic in their approach. The result, the parties saved tens of thousands of pounds in legal fees and other professional costs and reached an agreement within several months of starting the process.
Conclusion
A high-net-worth divorce doesn’t have to mean high legal costs. The use of a non-court dispute resolution process supported by sensible and pragmatic lawyers can be the difference between a six-figure divorce taking years to resolve and a divorce that concludes within months costing less than the average new car! Most importantly for H and W, they divorced with dignity.
If you are going through a divorce or separation and you want to work with a specialist family solicitor in a way which is dignified and aims to achieve a fair settlement for all, please feel free to email me at laura@consilialegal.co.uk
Laura Clapton
Director, family solicitor and accredited family mediator
*The parties names and some of the facts of this case have been altered for the purpose of confidentiality.