Bermuda: Friends With Benefits

Last Updated: 12 August 2013
Article by Appleby  

Divorce proceedings usually evoke notions of hostile and expensive litigation. Indeed, many such high profile divorces make for good journalistic fodder and the recent case of Sekhi v Ray [2013] EWHC 2290 (Fam) is a prime example. The husband in Shekhi v Ray is a partner in a world class American law firm and the wife is a paediatric anaesthetist. The parties have one child, a son, now aged approximately 2 ½ years. Their marriage was short, lasting less than four years. As a result of their acrimonious and prolonged child, divorce and ancillary relief -related litigation in England, Singapore and India, the parties spent approximately £860,000 on legal costs. This sum amounted to almost one quarter of their total net accumulated wealth (estimated at £4 million), leading the Judge to equate the parties' litigious behaviour to 'financial suicide.'

The case of Shekhi v Ray can be held up as an albeit extreme example. For the cost conscious individual there are however ways to navigate divorce proceedings which limit the emotional and financial burden of those involved in marital breakdown.

DIY Divorces: the Health Warning

The legal aid reforms which took effect in the UK earlier this year have led to a number of individuals choosing to become 'litigants in person' as they cannot afford legal representation and are no longer entitled to legally aided representation. As a result, alternative routes to settlement out of court are increasingly popular. Indeed recent reports have estimated that as many as one in five divorcing couples in the UK in the next year will initiate their divorce proceedings online. Such couples will save on legal fees but resolving how family assets should be divided and how children should be provided for without expert legal guidance will inevitably lead to injustice for some.

Talking Pays

The cheapest option is for parties to talk to one another, with legal representatives on hand to provide guidance and draft the necessary documentation once agreement has been reached. Where the playing field is level and both parties are committed to achieving an honest and fair outcome, this form of assisted negotiation is extremely effective in limiting emotional and financial costs. However, direct negotiation is not always viable or appropriate. Some marital breakdowns are simply too acrimonious, and in others one party may seek to coerce or bully the other or benefit from the informal nature of the discussions by being less than honest about the assets available for division. So what other options are there?

Swords Down

Sadly knights and duelling are not involved in a round table meeting. Instead, the parties and their legal advisers meet "around the table" to negotiate. Offers are exchanged and the parties may withdraw at any point to discuss matters in private with their legal adviser. A successful round table meeting enables the parties to determine how their assets are divided and avoid the cost of a full trial.

Mediation (and Meditation)

Lawyers are not necessarily involved in mediation. The parties are guided by a mediator, whose role is to facilitate communication, focus the issues of the dispute, and to put forward proposals that meet the parties' needs. Significantly however, a mediator cannot impose a decision upon the parties.

Mediation is a popular route to settlement as the negotiations, unlike Court hearings, remain confidential. The Jersey Family Mediation service will soon become available for divorcing couples on the Island who wish to mediate financial settlement. As with all negotiation, parties should be open to compromise to increase the likelihood of resolution.

To Trial or Not to Trial?

Where parties require a stronger steer to resolution, but want to avoid the cost of a full trial and the rigours of the witness box, arbitration or a private Financial Dispute Resolution ('private FDR') may be the answer.

Private FDRs are part of the formal process of divorce proceedings in the UK. In Jersey, private FDRs are voluntary, though they may become a mandatory requirement. Arbitration is a relatively new process in the UK and is subject to its' own rules and legislation. Jersey has its own Arbitration law, but it has yet to be applied within the sphere of family law. This too may be set to change.

Significantly, an arbitrator or private FDR judge listens to arguments put forward by the lawyers and makes a decision, much like a Judge in Court proceedings. The decision of the arbitrator/ private FDR judge will often be a good indication of the decision that the Court would make if the case was to go to trial. Prior to arbitration, the parties will agree to be bound by the decision of the arbitrator. This is not so for private FDRs, and in the event that a private FDR fails, the matter will progress to trial. These routes are confidential, and preclude the formality and expense of a full trial. It is perhaps no wonder that these routes to settlement are becoming increasingly popular.

The likelihood of settlement largely depends on the dynamics of the parties' relationship, but alternative dispute resolution does work. For anyone embroiled in, or embarking on family law proceedings, it is worth bearing in mind the financial advantages for both of you in remaining on amicable terms with your ex-spouse.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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