Joanna Grandfield answers your questions about settling a divorce case out-of-court
Divorce can be a difficult process, but there are better ways to separate if it’s possible to work together. We understand that when divorcing, sorting out the finances and children arrangements can be challenging. This is why we take an innovative approach to divorce law that prioritises reducing conflict wherever possible.
Here are some answers to typical questions on settling cases out of court by Joanna Grandfield, a specialist financial and children lawyer who is a Partner and heads the Mills & Reeve London family law and children team.
A trained barrister who is also a mediator and collaborative lawyer, her work involves advising clients with complex financial and children issues arising from family breakdown. She also drafts and advises on wealth protection issues, such as pre and post marital and co-habitation agreements.
Why should individuals consider settling cases out of court?
Settling cases out of court can be particularly advantageous for high-net-worth individuals for several reasons.
Firstly, it offers a level of privacy that court proceedings simply cannot. Accredited members of the press can now attend family court hearings and the details can be reported in the media, even if the names involved cannot . At the very least, this adds an additional concern for those who value their privacy. By settling out of court, the details of the dispute and the terms of settlement can remain confidential, protecting those involved and their business interests from unwanted publicity.
Additionally, settling out of court allows for more control over the outcome. In court, the decision is in the hands of a judge, and the outcome can be unpredictable given the discretionary system in which we operate. By negotiating a settlement, those involved have more say in terms of the process, timetable and ultimately the settlement itself thereby ensuring that their interests are better protected.
Furthermore, out-of-court settlements can be more cost-effective. Legal fees can quickly escalate in prolonged court battles. For high-net-worth individuals, the financial stakes are often higher. Settling out of court can save significant amounts of money that would otherwise be spent on legal fees and related costs.
What are the key considerations when negotiating an out-of-court settlement?
When negotiating an out-of-court settlement, individuals should consider several key factors.
It is essential to have a clear understanding of the financial implications of the settlement. This includes not only the immediate financial impact in terms of who retains what and the tax implications of doing so, but also any long-term financial consequences. It is advisable to work with other trusted advisers, including financial experts and members of a wider legal team with different specialisms to ensure that the settlement is financially sound.
Another important consideration is the impact on personal and professional relationships. High-net-worth individuals often have complex personal and business relationships. It is crucial to consider how the settlement will affect those and to approach the negotiation with a mindset of preserving them wherever possible.
Furthermore, it is essential to consider the tax implications of any deal. Different types of settlements have different tax consequences. It is important not only to structure the settlement in a way that is tax-efficient here, but to be mindful of tax treatment in any related jurisdictions. Consulting with tax experts can help ensure that the settlement is structured in the most advantageous way.
How can individuals ensure that their interests are protected in an out-of-court settlement?
To ensure that their interests are protected, high-net-worth individuals should work with experienced professionals who specialise in high-net-worth cases. They can provide valuable guidance and ensure that the settlement is fair not only in the eyes of those involved but also a Judge who will ultimately have to approve those terms. It is also important to conduct thorough due diligence and gather all relevant information both at the outset and as negotiations progress. This includes understanding the strengths and weaknesses of the case so as to be able to negotiate from a position of strength.
Additionally, it is important to have a clear and well-drafted order reflecting the terms arrived at. This should prevent future disputes and ensure that the settlement is enforceable.
Finally, it is important to approach the negotiation with a mindset of compromise. While it is important to protect one’s interests, it is also important to be willing to make concessions to reach a mutually agreeable settlement. By approaching discussion with a spirit of co-operation and compromise, we can achieve a settlement that is fair and beneficial for all parties involved.
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