Legal costs on divorce

Bob Hope was quoted as saying “America is a country where the Olympics and the divorce lawyers both have the same slogan – Go for the Gold”. Are family lawyers in Jersey really that expensive and, if they are, what can you (the unfortunate client) do about it?

The short answer is that divorce lawyers are not cheap, and nor should they be. They have, after all, studied and worked hard to achieve expertise in a difficult area of law. The more complicated your situation the more time and skill will go into helping you to achieve a fair outcome with the least possible pain. That said, you should not find yourself in a position where the lawyers end up with more of your money than you do. The fees we charge should be proportionate to your case and you should feel that they are fair.

Big bills are unpleasant, and unexpected or unmanageable bills are a problem. Legal fees should never come as a surprise. We are required to provide you with information about your costs and, where possible, a sensible estimate of the costs you are going to incur. This enables you to plan and to ensure that your costs are proportionate to the issues in your case. You may not want to spend a small fortune to win a moral victory. You will not want to spend so much on your lawyer that you cannot buy a home. Do not assume, by the way, that your spouse will foot the bill – in the majority of cases each party will have to meet their own costs.

There are things that can and should be done to reduce legal costs. Lawyers will often provide an initial consultation at a reduced fee. They may well be able to offer a fixed fee and/or a payment plan which will enable you to manage your legal costs. Some lawyers will defer fees until the sale or maturity of an asset. Whichever lawyer you instruct remember that you are the boss, and make the most of their time – all good family lawyers expect to provide emotional support as part of the job, but bear in mind that you are ultimately paying for that emotional support.

Every family situation is unique, and this area of legal work requires an impeccable level of service – because our clients are frequently going through the worst time of their lives. Your prospective lawyer may describe themselves as the “largest”, the “boutique”, the “leading” or even the “best”; lawyers rarely advertise themselves as the “pretty average” or the “most expensive”. The trick is to look around for the right individual or firm who will give you confidence and meet your needs – at a price that you can afford and are willing to pay. When you find that person, make sure they give you value.

Not all family lawyers are in it for the money; but you should make sure they spend your money wisely.

Advocate Claire Davies
May 2021

A good time for big decisions? Divorce after Covid-19

A lifetime ago, in February 2020, the world was different. We booked holidays, sent our children to school, went to work, and shopped for things we didn’t really need. These were small decisions that now seem significant. What about the big stuff?

Most of us have had time (sometimes too much time) to think about the things that are important to us. Some relationships have become stronger, some are coming to an end. Some have been over for a long time, and it has become important to draw a line under them and move on. Everyone is worried when their relationship ends. For couples who decide to split up now, economic uncertainty may make the future an even more frightening place. What can I say to help?

Perhaps consider counselling. The end of a relationship is always sad, it is a tragedy if that relationship could have been saved. We have all been through a difficult time. There are services who can help couples to communicate again.

Even if the end of the road has been reached, that does not mean that open warfare must descend. These days, more clients are telling me that achieving an amicable resolution to their case is a priority. Most separating couples tend not to focus on divorce itself to start with – they want to sort out arrangements for their children, and their finances. How do you sort out your finances when some say we might be on the brink of financial catastrophe? We should be cautious and realistic when making financial decisions that will shape our future lives, but even in difficult times it should be possible to agree sensible arrangements if we have the right figures and the right advice. If long term decisions are difficult, we can resolve short term finances to ensure that both parties, and their children, are ok.

What if you are divorced and your settlement now seems unfair? When the Court has made a final order dealing with capital assets, it is very difficult to try to overturn that order. It is sometimes possible to review future obligations that have been impacted by a change in the financial position. That may include spousal or child maintenance or, in some cases, the timing of a lump sum payment or transaction. If you are affected, try to agree something sensible. If you can’t, take good legal advice quickly – delay is not helpful.

Think positive. The crystal ball shop is still closed for business, but Jersey has a resilient and resourceful population. We need to find our confidence and move on.

Claire Davies

This article originally appeared in Gallery magazine June 2020

Divorce and the Virus

We live in interesting times. In terms of our way of life, they could prove to be the most ‘interesting’ times in living memory. Yet, life goes on. People continue to make decisions about their marriages and their children and, in some cases, those decisions have been expedited by the circumstances that we currently live in.

Narrative reports from China suggest that there was a surge in divorce applications when lock down restrictions were eased. That is not surprising, enforced isolation with other family members can be a wonderful breeding ground for conflict – and there is nothing like a health crisis to cause us to reflect on our priorities and on our lives.

Experienced family lawyers know to expect an influx of separating clients after the school Christmas and summer holidays. Most of us are expecting to be busy in the coming months. But, what advice will we give our clients in this suddenly uncertain and hazardous world?

Divorce is a big decision and it comes with financial as well as emotional consequences. Even the optimists concede that Covid-19 will have a significant impact on the economy. Couples who are currently in the process or separation or divorce, and those who now embark on that journey, could be facing a very different world. Spouses who are making financial decisions, particularly if they are applying for mortgages or agreeing settlements, should bear that in mind – how sure are they that they are making a good bargain? How safe are they financially? Other spouses who have already divorced may find themselves in a completely different financial position to the one they bargained for. Nobody saw this coming.

In March 2019 Jersey’s Fiscal Policy Panel gave advice to the Government in advance of its 2020-23 Government Plan. The Panel covered a number of potential risks to the economy, including the possible impact of an unexpected structural crisis, but they could not have foreseen global pandemic related pandemonium just one year later. Towards the end of March 2020 the Fiscal Policy Panel updated the economic assumptions of the preceding year. The Panel highlighted extreme uncertainty as to the short term outlook. It seems likely that Jersey will see a fall in average earnings, a fall in profits and a slowdown in the housing market. I am not an economist, but it seems to me very difficult to know how long standing the financial impact will be.

What does that mean for divorcing couples? Think hard about all decisions relating to real property, particularly where the value is important for future security or where a mortgage will be required. It is likely that the current situation will impact on lending criteria as lenders and underwriters adjust. Be realistic about your income – don’t assume that a job, or a certain level of income is guaranteed. The truth is that we should always have some wriggle room in our finances. When financial advisers tell you that the value of your investments may go down as well as up, believe them. In the post coronavirus world, we should expect the unexpected.

Claire Davies

This article first appeared in Connect magazine April 2020

Divorce Mythology

Until you come to get divorced, matrimonial law is a mystery. When your marriage does breakdown it can seem like a dangerous world of expensive lawyers and unfair rules. It is true to say that divorces can be expensive, and the outcome often feels unfair, but there are popular misconceptions and myths that can be busted:

MYTH – Children always go to live with mum.
Arrangements for children vary widely, the important thing is that they work for your family and that they are in the best interests of your children. Increasingly, children are spending a lot of time with both of their parents. When you separate or divorce, try to agree a parenting plan that enables both of you to be an important part of your children’s lives. If you are struggling, consider family mediation.

MYTH – You only pay child maintenance when you see your children
Contact with children, and the maintenance paid to help support them, are entirely separate legal issues. Even if you do not see your children, you should be helping financially. Having said that, the court will be keen to help you to establish contact, provided it is safe.

MYTH – People who have had affairs will be, ‘taken to the cleaners’ by their spouses.
Although adultery is still a ground for divorce in Jersey (even if you start a new relationship after the breakdown of your marriage!) the family court very rarely punishes people financially because of their life choices, or even because of their poor behaviour. For the court to be influenced in any way by allegations of poor conduct the behaviour has to be “gross and obvious” which is legal speak for really, really bad.

MYTH – You can be a ‘common law’ spouse.
Some people believe that if you live together for a few years you become a common law spouse and have an entitlement to their assets on separation. That is not the case. Parents of children can bring some financial claims against the other parent but, aside from that, cohabitees have relatively little legal protection if their relationships break down. It is wise to take advice and consider a cohabitation agreement if you want to try to avoid nasty surprises.

MYTH – Prenuptial agreements are binding
No. A court is likely to give considerable weight to a well drafted agreement, and may decide to enforce it but, as the law stands, only a Judge can draw a final line under an agreement between spouses.

MYTH – Assets are always split down the middle on divorce.
There is no room for discrimination in family cases, and the court accepts that a breadwinner and a homemaker make equal contributions to a marriage. However, that does not mean that the Judge will always split the pot down the middle. In some cases, that does work. In others, particularly where there are young children, one spouse will need more than half of the available assets to be ok.

Don’t guess at what the rules are – and DON’T rely on the internet. Take advice.

Advocate Claire Davies
This article first appeared in Connect February 2020

Thinking of Divorce? Don’t be an Ostrich

Divorce is a bad time for everyone. It is stressful, it is (for some) heart breaking and it is expensive. Aside from the emotional trauma, separation and divorce create practical problems that need to be resolved. Most people going through a divorce worry about their future and their financial security. Unless you are lucky enough to have a great deal of money in the family pot, it will not be possible to maintain the standard of living that you had before the split – no matter how good your lawyer is. That is a frightening thought. We are all human, and it is tempting to turn a blind eye to financial issues, or to look at the numbers with rose tinted spectacles.

When Courts, and lawyers, are finalising matrimonial finances, we first work out how much capital there is, and what the family cash flow is like. In other words, how much money is coming into the family and how much is going out to meet living costs and expenses. Done well, this process enables everyone to make decisions about what they need and what they can afford. We look at current expenditure, and we try to work out what future expenditure will look like after the divorce. The parties themselves are instrumental in gathering that information, and the more accurate it is – the more likely you are to reach an agreement, and to end up with a settlement that works.

So, what can you do to help yourself?

• Get informed. In most marriages, one spouse takes the lead in running the household finances. If you are in the dark, find out more. You cannot take control of your situation unless you have the information that you need.

• Work out your budget properly. Most people guess what they spend on their day-to-day lives, and they tend to guess badly. The only way to make informed decisions about your future is to know what you spend – and what economies can be made. Look at a year of bank and credit card statements and work out the numbers. You may be surprised by the amount you spend on food and basic family activities.

• Take advice. Speak to your bank or lending companies if you are struggling to keep up payments. Find a good lawyer who is affordable bearing in mind the money you have. Will they agree to set up a payment plan so that legal fees can kept to a manageable level? Can your spouse be asked to help you to pay your fees?

• Be open and honest. Never give a court, your former partner or your lawyer misleading or incorrect information. Don’t hide anything. If you do it may be impossible to resolve your case fairly, and the outcome may be a financial settlement you do not like – or one that falls apart at a later stage.

Don’t put off dealing with your family finances. Delay rarely makes things better, and can make them a great deal worse.

Advocate Claire Davies
This article first appeared in Connect December 2019

‘til death do us part? Spousal maintenance on divorce

There are still people who believe that if they just maintain separate bank accounts, and keep their house in their sole name – their spouse will not be able to claim a share of their assets. They are wrong. There are also people who think that their business assets and pensions are untouchable on divorce. They are wrong too. Divorce can bring nasty surprises for anyone, but it is often the prospect of paying spousal maintenance that feels the most unfair to breadwinners.

When you divorce, a court has the power to order one spouse to pay an income to the other. This tends to happen where one spouse has a significantly higher income than the other, but that is not always the case. Spousal maintenance payments may be ordered whether or not you have children and they can continue, in theory, until one of you dies. They are generally index linked and can be subject to an upward (or downward) review if your circumstances change. Payments can even be secured on property. In Jersey, even if your former spouse cohabits or remarries that may not automatically bring an end to spousal maintenance payments. The purpose of spousal maintenance is to enable former spouses to meet their reasonable needs, and in a high earning family ‘reasonable needs’ may mean a very nice standard of living indeed. It is scary stuff.

Most people – judges included – see the benefit of achieving a clean break. That is a settlement which draws a line under the financial relationship between former spouses with no ongoing spousal maintenance payments made by either party. To make this possible the court may award more of the assets to the financially weaker party and/or order the other party to pay a cash lump sum to them. The idea is that this additional injection of capital reduces the income needs of the receiving spouse and it may then be possible for them to make ends meet without additional help. Perhaps most importantly, it provides peace of mind and allows people to get on with their lives. Unfortunately, there isn’t always enough money to make this possible.

Is spousal maintenance fair? Homemakers who are caring for young children may not be able to earn enough to have a reasonable standard of living, even if they keep more of the available capital. Even where children are older, spouses who have sacrificed time from their careers to raise a family are likely to be at a significant handicap on the job market. In these days of equality, parents raising children are expected to make their way back into work once their children are older and it is now more common to have spousal maintenance paid for a fixed term so that the person receiving payments can ease their way back into independent living without undue hardship. But, with a high cost of living and very expensive housing costs spousal maintenance is sometimes unavoidable in Jersey.

Advocate Claire Davies
This article first appeared in Connect September 2019

What’s mine is yours, what’s yours is mine.

All divorcing couples need to sort out their finances.  The family court has considerable power when it comes to arguments over money.  A judge can order assets to be sold and can decide how the proceeds should be divided, they can order one spouse to pay a lump sum to the other or to transfer assets to them.   They can order a spouse to provide their former partner with an income – potentially for the rest of their life.  How does the court decide what to do? The law in this area has become complicated, but the basic principles are straightforward.

All assets are in the ‘pot’ and must be disclosed regardless of whose name they are in, when they were acquired or where they came from.  That includes pensions, inherited assets and business interests.  The court will consider the assets globally and decide how they should be shared.  The emphasis is on equality.  In almost all cases the court will treat spouses as having made an equal contribution to the marriage, even if one of them was a homemaker.  Assets will generally be shared equally unless there is a good reason to do something else, and most often that reason is ‘reasonable need’.  One spouse may be in a weaker financial position than the other often because they have focused on caring for the family.  The court may take into account the nature of the assets – not all assets are easily realisable or risk free.  If assets were generated before the marriage, after the separation, or were inherited that may also be relevant.  The length of the marriage will be an important factor.  All of this adds up to the court doing what is ‘fair’ in a particular case although the outcome can feel anything but fair to those involved.

If there are children it is quite likely that one parent will pay child maintenance to the other.  That is often calculated as a percentage of their net income, Jersey tends to broadly follow the English guidelines.  There may also be school and university costs to pay.  On top of that, if there is insufficient capital to meet everyone’s needs, a higher earner may well find that they have to pay spousal maintenance to their former spouse.  The amount will depend on their ability to pay it, and the needs of their spouse.   In these days of equality, all spouses must do their best to improve their own position and it is now less likely that spousal maintenance will be paid for many years.

The process can be a minefield and specialist advice is important.  Legal costs can be high, and may even become an obstacle to a fair settlement if they get out of hand.  All clients should discuss costs with their lawyers.  You may need to negotiate a payment plan that will enable you to retain the lawyer of your choice, whilst structuring legal fees in an affordable way.

Divorce is never easy.  The majority of couples will, however, reach an agreement that they can both live with.  At the end of the day, perhaps that is what ‘fair’ means.

Advocate Claire Davies
This article first appeared in Connect April 2019

Family Disputes – Positively charged

“Marriage is really tough because you have to deal with feelings… and lawyers.” – Richard Pryor

All family lawyers know that people come to us during one of the most stressful periods of their lives. Whether they are separating, divorcing or struggling to agree arrangements for their children our clients are inevitably worried about the future; they are often sad and frightened. It is important that people in this position pick the right lawyer who will understand their particular needs and who can give them specialized legal and emotional support. Our clients have to feel comfortable sharing their private thoughts and feelings with us, and they have to trust us to achieve a good outcome and to respect their privacy in a small community. We help them see that there is light at the end of the tunnel. As if that wasn’t enough, parties to family disputes have to deal with the financial consequences of their situation. If they are divorcing, they have to trust their lawyer to help them navigate the sometimes complex rules relating to the division of assets and income, and the outcome will not always seem fair. If they are trying to resolve arrangements for children, they may have to make difficult concessions. Feelings will run high. And then they have to worry about the legal costs which will inevitably drain the family finances. Unfortunately, legal fees in family cases can easily spin out of control. So, what can lawyers and clients do to keep costs down?

“A lawsuit is a fruit tree planted in a lawyer’s garden.” – Italian Proverb

Most family lawyers in Jersey still charge on a time spent basis, and family disputes are time consuming and can be unpredictable. Be prepared to ask about fixed fees and payment plans. A good lawyer will always be happy to hold an open discussion about their approach to billing. They should avoid duplicating fees if more than one lawyer is working on your case, and their fees should be reasonable for the job that they have been asked to do.

In the UK, the Legal Ombudsman advises members of the public to raise ten points when using legal services, pointing out that lawyers should provide clear information about costs:

  1. Will I be charged for a consultation?
  2. How do you cost your service?
  3. Can you tell me more about the way you charge?
  4. What is a fixed fee and what will it cover?
  5. You charge an hourly rate but I’d like an estimate of the cost of the whole service. What will my final bill look like?
  6. Could my costs change? How will you let me know if they do?
  7. Are there any extra costs?
  8. Can I get help with the cost?
  9. When will I be billed and how long will I have to pay? Do you offer payment options?
  10. What happens if I disagree with the amount I’ve been charged?

In Jersey many of these questions should be addressed in the engagement letter sent to the client, but don’t be afraid to ask these questions during the first meeting or telephone call.

“Lawyers spend a great deal of their time shovelling smoke.” – Oliver Wendell Holmes, Jr.

In family disputes, a lot of time and money can be spent writing, and responding to, bad tempered correspondence between opposing lawyers. There is an obvious temptation to try to gain the moral high ground when, in reality, it will rarely affect the outcome of a case. Try to avoid it.

“Avoid lawsuits beyond all things; they pervert your conscience, impair your health, and dissipate your property.” – Jean de la Bruyere, French Philosopher & Essayist

Court cases cannot always be avoided, but where family disputes have to come before a judge the proceedings should be dealt with effectively, efficiently and respectfully. The Court will do its best to help parties manage the litigation, but clients should always have a clear plan of action when embarking on litigation. Understand that family law is highly discretionary and that there is no guarantee of success.

“A lean compromise is better than a fat lawsuit.” – George Herbert, Poet

Your lawyer should always set out all of your options and be able to explain the up side and down side of each of them. Legal costs should be proportionate to the case, and all clients should be encouraged to find a compromise if possible. This is particularly true in family financial disputes. A family lawyer should be happy to guide clients through the process of settlement, using mediation or other dispute resolution tools where appropriate. Be under no illusions, family litigation can be expensive and harmful to future relationships between parents. It can also take its toll on children.

“Discourage litigation. Persuade your neighbour to compromise whenever you can. As a peacemaker the lawyer has a superior opportunity of being a good man. There will still be business enough” – Abraham Lincoln

Make sure that you and your lawyer work in partnership. Teamwork should help to ensure that you achieve an outcome to your case as quickly as possible and without breaking the bank.

Claire Davies, Advocate

February 2018