May 10, 2014
Just like DIY at home, taking a do-it-yourself approach to your divorce can end up in an expensive bungle. But with some preparation – and a bit of legal handholding – you and your soon to be ex can escape ruinous bills.
We report on cost-cutting options from going it alone and lawyer-free mediation to keeping legal involvement to a minimum.
While divorce paperwork must go through the courts eventually, not all cases involve couples appearing in court and appointing barristers.
DIY can work for those who can easily agree financial terms and custody of the children. All the documents you need can be downloaded from justice.gov.uk. You simply pay a court fee of £410.
Mark Edwards, general manager at online legal service Rocket Lawyer, says: ‘Most couples start with a separation and it makes sense, if you can, to come to an agreement at this point about what happens to your finances, property and possessions.
‘You should capture these decisions in a separation agreement because by having this in place before you start your divorce, you save all the money you would otherwise have spent discussing and documenting that same detail in a lawyer’s time.’
Services such as Rocket Lawyer can help couples produce the separation agreement online, saving more money and guiding them through the creation of the agreement step-by-step. It also offers access to a discounted lawyer – usually at a third of their usual hourly fee.
A word of caution. Lawyers sometimes end up picking up the pieces of botched DIY divorces – and you will have to pay.
Angharad Lynn of London-based law firm Belmont & Lowe, says: ‘Going it alone can be dangerous. You only get one chance to get this right and if there is a lot of money at stake saving a few thousand pounds in lawyers’ fees may turn out to be a false economy, especially if you are the spouse with fewer assets.
‘Your solicitor will obtain full financial disclosure to ensure that they have the whole picture of finances before any agreement is reached. We get clients who have started filling in the paperwork themselves only to have it sent back to them by the court because of errors. It can sometimes be more expensive to unpick these errors than to start the process from scratch with a lawyer.’
BARRISTER COST MY WIFE £600 AN HOUR
Shaun Hunt’s divorce from wife Liz two years ago took about 10 months and importantly in terms of stress and cost didn’t end up in court.
Shaun, 42, from Malmesbury, Wiltshire, says: ‘I paid about £15,000, which I think was quite cheap.’
The couple – both of whom have since met new partners – have two daughters who they share contact with equally and have managed to stay amicable during and following the split that divided assets including a £1 million house.
Shaun, a director of a cardboard box company who also has his own smallholding, says: ‘We decided to call it a day after 11 years as we weren’t happy. We initially tried to agree it all ourselves but it didn’t work.’
The couple then appointed their own solicitors. Shaun found his first firm too slow and so on the recommendation of a friend signed up instead with Crallan Family & Divorce solicitors.
He says: ‘They did their utmost to keep barristers out of it. Richard Crallan said “you’ve got me – you don’t need a barrister”. My wife wanted one and paid about £600 an hour and she ended up paying more for the divorce than I did.’
Another key to keeping costs down, Shaun says, is to take great care over completing Form E, the lengthy document that summarises each party’s finances. ‘It’s the most important thing to get right. You have to declare everything you own – I think the only thing that was excluded was my wife’s engagement ring.’
MEDIATION – WITHOUT LAWYERS
New laws brought in last month mean divorcing couples must first try to resolve the terms of their split through a mediation process rather than automatically heading down the costly court route. This is to help curb the huge number of cases ending up in court – 117,000 last year.
The costs of splitting should be lower through mediation because neutral negotiators rather than expensive solicitors and barristers guide couples through agreements over children and money.
And while Legal Aid was abolished last year for most divorce cases – apart from those involving violence or forced marriages – eligible couples using mediation can still apply for state help.
The average bill is £500 a couple through mediation, says the Ministry of Justice, compared with £4,000 a person for break-ups settled through the courts. Mediation also takes just 110 days, a quarter of the time it takes for court splits.
Around 17,000 people chose mediation last year with just six per cent requiring legal support.
If basic mediation stumbles, or you want to avoid mistakes, you can choose ‘lawyer assisted mediation’.
Couples can turn to this if they get stuck on one or two key points. Lawyer Supported Mediation is a network of solicitors – Lynn’s firm is one of them – that offers fixed fees for this service and can organise a guided divorce for as low as £1,500 plus VAT.
ARBITRATION AND COLLABORATION
Arbitration is when you call in a lawyer to decide on a single stumbling block, minimising legal fees.
Collaboration is another option, involving a couple and their respective solicitors having round table meetings. Lynn, says: ‘This is where they thrash out the divorce settlement, again with the goal of not having to go to court.’
Even if collaboration doesn’t work and you need to get full legal assistance it is possible to prevent fees spiralling out of control. Lynn says: ‘Don’t use your solicitor as a shoulder to cry on or as a counsellor, however tempting it may be as they will have to charge you. And do respond promptly to queries and return paperwork quickly because if your solicitor has to keep chasing you for answers then they will charge for the additional time they have to spend on your case.’
Richard Crallan, family lawyer and author of a new book, Secrets Of a Divorce Lawyer, is an advocate of fixed fee divorces as a means of removing the fear and uncertainty of escalating legal bills.
He says: ‘Traditionally, solicitors charge by the hour and you get an estimate but the likelihood is this will be exceeded.’
TEN WAYS TO SPLIT AND EASE THE PAIN
1) Try mediation if DIY negotiations fail.
2) Find a solicitor who will act for a fixed fee if mediation doesn’t work.
3) Make sure your ex gives you full financial disclosure via Form E. Set a deadline.
4) Avoid voluntary disclosure – the process of filling in Form E outside the court process. It has no teeth.
5) Obtain a written agreement on how time is split with children before you sort out the finances.
6) Complete Form E carefully. Leaving pages blank or not including bank statements will make your ex think you’re hiding something.
7) Can’t afford a lawyer? Check the Family Procedure Rules 2010 at justice.gov.uk.
8) If you can only afford a lawyer once, do it before you make your settlement proposal or respond to your ex’s proposal.
9) Appoint a barrister under the ‘direct access scheme’ if you do go to trial. You used to have to hire a barrister through a solicitor – with added costs – but you can now go direct. A junior barrister will usually be cheaper.
10) Have a mediation agreement written up as a ‘consent order’ and approved by the court. If you don’t, it will not be legally binding and your ex spouse can come back for more money or a change in terms years down the line.
From Secrets Of A Divorce Lawyer published by CreateSpace, £12.99.
Crallan, whose firm offers the option of fixed fees, says: ‘For many people on average salaries, who will not now have access to Legal Aid, this means facing bills of £190-£275 an hour. I believe that hourly billing is responsible for some inefficient working practices that make using a solicitor to get divorced more expensive than it ought to be.’
‘Often solicitors will leave pages blank or miss out attachments,’ says Crallan. ‘Each side will chase the other for the missing information and charge accordingly. Thousands can be spent this way.’
His clients are offered fixed prices based on the value of the assets to be split: up to £50,000 costs £3,500; £50,000 to £100,000 is £5,000; £100,000 to £500,000 is £7,500; £500,000 to £1 million is £12,000; and £1 million to £5 million is £17,750.
Crallan’s firm also helps those who want to do their own divorce. He says: ‘It’s a route that works for some people and depends on how difficult the other side is being.’
He adds: ‘If you do not want a solicitor to “stand in your shoes” and act for you, we can provide assistance on demand, maybe only once every few months. The rest of the time you can act for yourself.’