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Financial Terms & Financial Court Orders explained

Maintenance pending suit, add-backs, conduct argument, With notice & Without Notice (ex-parte) Application, financial resource, legal services order, periodical payments, lump sum order, Continuation Order, property adjustment order, clean break order, mesher order, martin order, Freezing Order, an avoidance of disposition order, substantive & nominal maintenance order,
term order , whole life order, Interim order, Costs Order, Anton Pillar Order, Calderbank Offer,
Hadkinson Order, Hemain Injunction, Imerman Documents, Rose Order,
Occupation Order, Non-Molestation Order, Harvey Order, Connell Order, Liability Order, Sears Tooth Order,
Section 91 (14) Order, Tomlin Order, Wasted Costs Order, Slip Rule, Offsetting,
The Marital Pot, The Sharing Principle, The needs Principle, Compensation & Trapped Capital

 

WHAT IS A MAINTENANCE PENDING SUIT IN THE FINANCIAL FAMILY COURT PROCEEDINGS?

Once the court process for the division of your marital assets, finances and pensions has started, the financially weaker spouse in the divorce can make an application to the family court for a maintenance pending suit. You can do this by completing and submitting form D11.

LINK TO OUR L.I.P HELP GUIDE FOR FORM D11

Another name for a maintenance pending suit is interim maintenance. A maintenance pending suit order is when the court orders the financially stronger party to provide for the financial needs of the other party during separation and during the divorce proceedings. This must be paid until the court says otherwise. 

The maintenance pending suit application will be heard at a court hearing. The court can backdate the maintenance pending suit from the day the divorce petition was filed. There is no tax payable on these payments. These payments also do not affect working tax credits, but can affect income support, housing, and council tax benefit.

WHAT IS AN ADD BACK IN THE FINANCIAL FAMILY COURT PROCEEDINGS?

Add backs in financial family court proceedings are when marital assets, investments, and property are added to the marital pot before the division of the marital pot. Normally, this happens when you or your ex-partner has hidden, used, sold, spent, disposed off, or not declared a marital asset. This is allowed under the Family Law Act 1975. You can make a request to the judge during a court hearing or by completing and submitting a form D11 application to do this.

LINK TO OUR L.I.P HELP GUIDE FOR FORM D11

WHAT IS A CONDUCT ARGUMENT IN THE FAMILY COURT?

The court can, in unusual circumstances, take your conduct or the conduct of your ex-partner in the marriage, separation and during the divorce into account in financial proceedings. Normally, this concerns the most extreme forms of negative behaviour.

WHAT DOES A ‘WITH NOTICE’ AND ‘WITHOUT NOTICE (EX-PARTE)’ COURT APPLICATION IN THE FAMILY COURT MEAN?

What is a ‘with notice’ court application?

There are many court forms you can complete and submit asking the family court to do this and to do that.

The vast majority of these applications require you to send multiple copies of your completed form and all the attachments that go with it to the court so they can send a copy to anyone else that is involved or connected to your application. 

In court language this is referred to as ‘to serve‘ and it essentially means all other individuals involved or connected to your application must receive the relevant paperwork that require them to be informed, respond, comply with directions or attend court. 

This is called a ‘with notice’ application. 

If the court requires you to serve another person a copy of your application form yourself then you are required to notify the family court that you have done this by sending them a completed statement of service form.

LINK TO OUR L.I.P HELP GUIDE FOR FORM FL415

LINK TO OUR L.I.P HELP GUIDE FOR FORM FP6

What is a ‘without notice (ex parte)’ application?

Occasionally you may need to submit an application form for a court order in an emergency and you may NOT want to inform the other individuals involved or connected with your application that you are doing this in case they try to stop you or harm you and/or your children. This is called a ‘without notice’ application where other individuals are not informed about your application.  

A ‘without notice’ application can also be referred to an ex parte application. 

A court will take a ‘without notice’ application seriously and where appropriate they will temporarily make the requested relevant order to protect or provide relief for the applicant (you – the person who made the application). This will be made at a court hearing that only you (and your solicitor or social worker) will attend. As soon as possible another hearing will take place where all other individuals involved or connected to your application will be invited to attend and put their case forward. At this stage the temporary court order can be made into a proper court order, it can be amended, or revoked. 

Some application forms will ask whether the application is a ‘with notice’ or ‘without notice’ application, others will not. Whether the form asks you or not, in both cases you will need to explain in detail why you have made a ‘without notice’ application. 

WHAT DOES FINANCIAL RESOURCE MEAN?

A financial resource is an asset such as liquid assets, reserves, money, or stash which forms part of the marital pot under section 75(2)(o) of the family law act because it has a future financial benefit.

The matrimonial pot encompasses all the marital assets that have been accumulated during the marriage by both parties. This does not include any pre-marriage assets or anything that has been inherited or given to either party during the marriage.

WHAT IS A LEGAL SERVICES PAYMENT ORDER (LSPO)?

This is a court order where one ex-partner must give a lump sum to the other ex-partner. This often happens where the financially stronger ex-partner will give money to the financially weaker ex-partner for legal fees, advice, or mediation. This is often done when the financially weaker ex-partner is not eligible for legal aid. An LSPO can be a one-off payment or paid in instalments, payments can continue for a specified time or deferred payments set for the future. Any payment made under a LSPO order may have to be paid back into the matrimonial pot at the end of financial settlement proceedings.

WHAT ARE PERIODICAL PAYMENTS?

Another term for periodical payments is maintenance payments. This is usually paid by the financially stronger ex-partner to the financially weaker ex-partner for child maintenance, spousal maintenance, and help with legal fees. Periodical payments are paid on a regular reoccurring basis, often monthly.

WHAT IS A LUMP SUM COURT ORDER?

A lump sum court order is when a judge orders one ex-partner to pay a lump sum of money to the other ex-partner. This can be, for example, when the marital house is transferred to one ex-partner so they can remain in the home. They need to pay a lump sum to the ex-partner moving out for their share of the marital house.

WHAT IS A CONTINUATION ORDER ?

A continuation order is issued by the court stating that either you or your ex-partner can occupy/live in the matrimonial/family home after the divorce. This type of order is made when the financial settlement aspect of the divorce has not been finalised and the party that has made a home rights application to the land registry would like to continue to live in the matrimonial home. Home rights often ends when a final order is issued by the court. A final order is a legal document stating your marriage has ended.

A continuation order is often made for a set time period.

If a continuation order is granted by the court then the person who has the home rights must apply to the land registry again to renew the home rights. For more information please click on the link below.

LINK TO OUR L.I.P HELP GUIDE FOR YOU AND YOUR MATRIMONIAL HOME RIGHTS

WHAT IS A PROPERTY ADJUSTMENT ORDER?

This is a court order where the court has decided what happens to the marital home during a divorce, for example, one ex-partner is ordered to transfer the marital home to the other ex-partner. 

WHAT IS A CLEAN BREAK ORDER?

A clean break order is a court order between two divorcing ex-partners declaring that there are no financial ties left between them. There are no spousal maintenance payments and neither ex-partner can make any claim on any future assets and income after the divorce.

A clean break order has no bearing on and does not affect child maintenance and child responsibility. It also has no effect on a child arrangements order or a parenting plan. 

You can write a draft clean break agreement yourself by using a template from the internet or with the help of an online divorce company. It must be sent to the judge to agree and make into a court order.

There are no spousal maintenance payments when it comes to a couple wanting a clean break order. As far as spousal maintenance is concerned, they can both agree a lump sum payment to be paid to the ex-partner who would receive spousal maintenance. This is called a ‘buy out or buying out spousal maintenance payments’. This can be paid in one lump sum or in instalments. This must be carefully thought out as future instalments could be altered by the court. Another method of doing this can be to invest a certain amount of money and the party who would receive spousal maintenance would receive an income from it, instead of getting regular maintenance payments.

In England and Wales, the court can force a ‘buy out’ on you. In Northern Ireland, both parties have to agree to the ‘buy out’.

In most cases, a clean break order is final. Once the division of property, savings, and other assets are agreed and finalised, neither you or your ex-partner can make future financial claims against each other. However, a judge can amend a clean break order if the judge feels it is unfair.

WHAT IS A MESHER ORDER?

A mesher court order is an order where it is not in the best interest of the family, especially the children, to sell or transfer the marital home, therefore, it can be ordered to be sold or transferred at a later date. A mesher court order is also known as an order for a deferred sale. The marital home will remain in joint names until the time for the sale or transfer. This is usually called the trigger point. A trigger point could be when the children reach adulthood or when the children leave home. If the trigger point is death or remarriage of the ex-partner who remains in the property, then this court order is called a martin order.

A mesher court order, in some instances, allows the court to ensure both ex-partners and the children have their housing needs met. A mesher order can provide stability for the children by allowing them to stay in the home and reduce stress for the family by not selling the marital home at the same time as the divorce proceedings are in progress. The marital home could also go up in value during the time it remains as the family home, which is advantageous to the whole family.

However, a mesher order will mean that both ex-partners cannot sever ties permanently and capital (money) will be tied up in the marital home for some time, maybe years. This may be a temporary fix for the family as the issues of adequate housing for both ex-partners may arise again when the marital home is sold. Another factor that needs to be taken into account is the capital gains tax that the non-occupying ex-partner will have to pay when the marital home is eventually sold.

WHAT IS A MARTIN ORDER?

This court order is similar to a mesher order, except there is an indefinite postponement of the sale of the marital home. The ex-partner who will remain in the marital home can usually live there until their death or some other trigger point mentioned in the mesher court order above.

WHAT IS A FREEZING ORDER (previously known as a Mareva order)?

A freezing order or a freezing injunction (special relief to freeze marital assets) is an interim court order usually issued by the high court to prevent you and/or your ex-partner from depleting, destroying, disposing, selling, hiding, using, or accessing any marital asset including bank accounts and investments. A freezing order is issued under section 37 of the senior courts act 1981.

The marital asset(s) can be solely or jointly owned or held by a third party. A freezing order will safeguard the marital asset so that it is part of the matrimonial pot. For this to happen the partner who is requesting the freezing order must have solid reasons for asking, be able to show there is a real risk of their ex-partner disposing or hiding assets and where possible evidence should be provided. 

A freezing order application is usually made ‘without notice’. This is where the partner whose assets are being frozen is not told so that they cannot dispose of the marital asset ahead of time. Once the court receives your application they will assess it and it will be listed for a hearing quite quickly. At this hearing if a freezing order is granted it will be for up to 14 days. There will then be a further hearing called a ‘return date’ where both the you (the applicant) and your ex-partner (the respondent) will be in attendance. At this hearing the court can vary, discharge or retain the freezing order.

The marital asset can be either in the UK or abroad, however there are some parts of the world where the freezing order may be difficult to apply. 

If you are making the application for the freezing order you are called the applicant and your ex-partner will be known as the respondent. As the applicant, you will be asked to take an undertaking that if it is found later that there was no reason for a freezing order then you will need to compensate your ex-partner. You may also be liable for third party costs such as the banks costs in administrating the freezing order.

An application for a freezing order should not be done lightly and requires a great deal of thought due to how expensive it can get especially if your ex-partner is going to contest your application at the return date. The court will also take many things into consideration before considering a freezing order such as the detrimental effect on other business partners if the freezing order will effect a business. 

An account freezing order (AFrO) is a court order freezing funds in a bank or building society account.

The form used to apply for a freezing order is form D11.

LINK TO OUR L.I.P HELP GUIDE FOR FORM D11

WHAT IS AN AVOIDANCE OF DISPOSITION ORDER?

Sometimes just prior to or during a divorce one ex-partner can sell, dispose of, hide, or transfer marital assets to benefit themselves financially. This is usually at the expense of the other ex-partner financially. This would be to reduce the value of their claim. 

If the marital assets you are concerned about have NOT been sold, disposed of, hidden, or transferred as yet, you can make an application to the high court using form D11 and apply for a freezing court order as discussed above. 

If the marital asset HAS already been been sold, disposed of, hidden, or transferred, then you can apply to the high court using form D11 for an avoidance of disposition order. This is a court order setting aside or preventing you or your ex-partner from disposing of an asset or money. 

An avoidance of disposition order is governed by section 37 of the matrimonial clauses act 1973. The marital asset must have been disposed of less than 3 years prior to the court receiving the form D11 application.  If you are the applicant you must prove to the court that any transaction that your ex-partner did was for the sole purpose of preventing you from benefitting financially from the asset during a divorce or separation. You must also provide evidence that this was the outcome. 

Please remember that the court can exercise it’s own discretion and set aside a transaction. They can do this under section 23 of the matrimonial and family proceedings act 1984.

The court can also add back the amount to the matrimonial pot during the divorce proceedings.

LINK TO OUR L.I.P HELP GUIDE FOR FORM D11

WHAT IS A SUBSTANTIVE AND NOMINAL MAINTENANCE ORDER?

A nominal maintenance order is a financial court order made to safeguard an ex-partner financially. An ex-partner may be able to presently support themselves as the means are available, however, this may not be the case in the future, meaning that the ex-partner may require financial assistance from the other party. As a result, a nominal maintenance order can be granted in favour of the ex-partner where they will receive a small amount every month or year. This can be assessed later and made into a substantive maintenance order. A substantive maintenance order is a set payment, normally a larger amount, made to an ex-partner every month for their living expenses. This will safeguard this ex-partner for all eventualities.

WHAT IS A TERM ORDER?

A term order is any financial court order that has a start and end date is also referred to as a term order. An example of this is when a couple have been married for less than 5 years and spousal maintenance is awarded to the less financially well-off spouse for a set period of time stated in the court order until they can get themselves back on their feet. 

WHAT IS A WHOLE LIFE ORDER?

A whole life order is a court order issued during a divorce where the term is unlimited. An example of this is a whole life maintenance court order where maintenance is paid by one ex-partner to the another until the death of either party. Sometimes a whole life is referred to as a joint lives order.

WHAT IS AN INTERIM ORDER?

An interim order is a court order issued and actioned whilst divorce proceedings are ongoing. At the end of divorce proceedings the interim order is either ended or replaced with a final order. An example of an interim order is a maintenance pending suit order mentioned above.

WHAT IS A COSTS ORDER?

A costs order is a court order stating that one party will pay the full legal fees of the other party or contribute some money to cover part of the legal fees. A judge will normally determine this at the end of the divorce proceedings, however depending upon the conduct of the parties, this can be determined at any stage of the proceedings. Legal costs include solicitor and barrister fees and other relevant legal fees incurred. 

WHAT IS AN ANTON PILLAR ORDER?

An Anton Pillar Order in family proceedings is also referred to as a search order. The court can order the search of the private premises of an individual for the inspection and seizure relevant papers, evidence, documents and things. This order is only made in exceptional circumstances.

WHAT IS A CALDERBANK OFFER?

This is a settlement offer made by one party to the other in divorce proceedings to save costs. A Calderbank offer can also be referred to ‘without prejudice save as to costs settlement offer’. This usually occurs to stop legal costs spiralling out of control. 

WHAT IS A HADKINSON ORDER?

A Hadkinson Order is made when an individual is in contempt of court many times and is not complying with court directions. The Hadkinson order will stop this individual from taking part in further proceedings until these directions are complied with.

WHAT IS A HEMAIN INJUNCTION?

A hemain injunction is a court order which does not permit an individual from pursuing a divorce in another country.

WHAT ARE IMERMAN DOCUMENTS?

These are papers and documents that have been obtained during a divorce by an illegal manner that could lead to criminal proceedings. They cannot be used in court.

WHAT IS A ROSE ORDER?

A rose order an agreement that has been reached in court and approved by a judge but has not yet been written up and sealed into a court order with a court stamp. The rose order came about because of the case Rose vs Rose where a financial agreement was reached at a financial dispute resolution (FDR) that was approved by the judge. The agreements and decisions were not written down into a court order but the court still upheld the full agreement reached at the FDR.

WHAT IS AN OCCUPATION ORDER?

An occupation order is an injunction to be excluded from the property in which you both live. The court will decide who will be allowed to stay in the home or any part of the home. The form used to apply for an occupation order is form FL401. Please click the link below.

LINK TO OUR L.I.P HELP GUIDE FOR FORM FL401

WHAT IS A NON-MOLESTATION ORDER?

A non-molestation order is an injunction against a named person to stop them threatening violence against you and your children and to prevent them from coming to and near your home. The form used to apply for a non-molestation order is form FL401. Please click on the link above.

WHAT IS A HARVEY ORDER?

A harvey order is a court order that states that one spouse can remain in the marital home and pay rent to the other spouse who resides in another property elsewhere. 

WHAT IS A CONNELL ORDER?

This is a court order where a parent is ordered to pay a certain amount of child or spousal maintenance minus the amount calculated by the child maintenance service.

WHAT IS A LIABILITY ORDER?

This is a court order that enables a public body like the child maintenance service to enforce payment

WHAT IS A SEARS TOOTH AGREEMENT?

This is a contract between a solicitor and a client whereby part of or all of your divorce financial settlement will go towards paying your divorce legal fees. If you do not have the means to pay for your divorce legal bill as you go along then this agreement is often put in place before the solicitor takes on your case so they get paid.

WHAT IS A SECTION 91 (14) ORDER (ALSO CALLED A BARRING ORDER)?

This is a court order that stops an individual involved in the proceedings from making further applications until the end of the proceedings or until when the court order states. This order is also called a barring order.

WHAT IS A TOMLIN ORDER?

This is a form of consent order. It is an agreement between both parties involved in court proceedings. It is like a contractual agreement but it is legally binding. The typical Tomlin Order is when all further divorce proceedings and action have been stayed (stopped) as an agreement has been reached, however either party can apply to the court to resume proceedings if either parry does not comply with the agreement. They do not have to start fresh proceedings.

WHAT IS A WASTED COSTS ORDER?

This is an court order where an individuals legal costs are paid by their legal representative (solicitor. law firm or barrister) because the legal representative conducted the case in an improper, negligent, unreasonable and illegal manner. This is allowed under the Section 19A of the 1985 Act.

You can ask the judge about this at a hearing or you can make an application to the court. The form you will need is form D11

LINK TO OUR L.I.P HELP GUIDE FOR FORM D11

A wasted costs order can only be made against a legal representative.

WHAT IS THE SLIP RULE?

This is the rule that is used where a judge can correct a court order or judgement because a mistake, omission, typing error or accidental slip has occurred. If one party to the proceedings has noticed a mistake in a court order they can make an application for correction without notice. Under this rule notice does not need to be given to the other side nor is there a requirement for a hearing so the correction can be made. The form used to make this application during financial proceedings is form D11. 

LINK TO OUR L.I.P HELP GUIDE FOR FORM D11

LINK TO OUR L.I.P HELP GUIDE FOR WHAT IS A WITH NOTICE AND WITHOUT NOTICE (EX-PARTE) COURT APPLICATION 

OFFSETTING

Offsetting is the word used during the division of marital assets, finances and pensions in a divorce where one asset is offset against another of the same or similar value so that the assets can be kept intact, not broken up and the benefits of the asset retained. Offsetting is usually applied when dividing a pension between two divorcing ex-spouses. The court will sometimes offset the value of the pension with another asset of  similar value so the pension can remain intact. 

THE MARITAL POT 

The marital pot is an imaginary pot into which all marital assets and debts of a divorcing couple are placed. It is then this pot that is divided between the couple to achieve a fair financial settlement. 

THE SHARING PRINCIPLE

The sharing principle in divorce is the starting point where all assets should be divided equally (50:50) between both divorcing spouses except where there is good cause not to such as one spouse has little earning ability, has young children and no pension. In this case this spouse may be awarded a larger share of the marital assets. 

THE NEEDS PRINCIPLE

The needs principle is applied in a financial settlement case to make sure that both parties, especially the financially weaker spouse’s financial needs are catered for.

COMPENSATION

This is when one party in the divorce is compensated for being disadvantaged during the marriage compared to the other party. An example of this is when one party gives up a lucrative career to raise children and look after the family. In comparison the other spouse has continued to progress significantly in their career.

TRAPPED CAPITAL IN TERMS OF LEGAL AID

Trapped capital is inaccessible capital (usually in a home/property) that exists on paper but is not is not available to an individual so they can secure a loan against it for legal fees or for legitimate reasons they cannot or are not in a position to sell it. However, this trapped capital will result in them not being eligible for legal aid as it takes them above the threshold to obtain legal aid. Due to this the individual is disadvantaged by not obtaining legal representation and access to justice. 

LINK TO GOVERNMENT WEBSITE FOR TRAPPED CAPITAL PRACTICALITIES AND CASE LAW

LINK TO WEBSITE FOR PUBLIC LAW PROJECT FOR TRAPPED CAPITAL