Financial settlement disputes – Reaching resolution through family law

When couples separate or divorce, financial issues often become the most contested part of the process. Disputes over money, property, pensions, and debts can create long-lasting tension if not handled properly. This is where financial settlement disputes come into play – and why family law offers a framework to help resolve them fairly.

From informal negotiations to court-ordered solutions, there are several ways to resolve divorce financial settlement matters. This article explores how to reach resolution through family law, the processes involved, and what to expect when trying to achieve a fair outcome for both parties.

Background: What is a financial settlement?

A financial settlement refers to the division of financial assets, property, debts, and future responsibilities following the breakdown of a relationship, typically after divorce or separation. In family law in England and Wales, this includes:

• Property (jointly or individually owned).
• Pensions and savings.
• Business assets.
• Debts and liabilities.
• Income and spousal support.
• Child-related financial support (separate from child maintenance).

If couples cannot agree privately, these become financial settlement disputes, and family law offers structured ways to help resolve them.

Starting the process: Disclosure and initial negotiation

Full and frank financial disclosure

The foundation of resolving financial settlement disputes lies in transparency. Both parties must provide full and honest disclosure of their financial circumstances, including:

• Income and outgoings.
• Assets and liabilities.
• Bank statements, payslips, pension valuations, etc.

This can be done voluntarily, via solicitors, or using Form E in court proceedings.

Early negotiation

Before heading to court, couples are encouraged to reach an agreement through:

• Direct negotiation (with or without solicitors).
• Mediation.
• Collaborative law.

Early, open discussions often prevent disputes from escalating into legal battles.

Mediation and Alternative Dispute Resolution (ADR)

Mediation

A neutral third-party mediator can help facilitate productive conversations and suggest solutions. Mediation is:

• Voluntary and confidential.
• Often faster and cheaper than court.
• Suitable for couples with reasonable communication.

The government even offers mediation vouchers to help cover costs in many cases.

Other ADR Options:

• Arbitration: A private, binding decision made by an appointed arbitrator.
• Collaborative Law: Lawyers and clients work together in four-way meetings to resolve disputes.

While not always suitable, ADR methods can often lead to fair settlements without court.

When court becomes necessary

If informal methods fail, either party can apply to the Family Court for a Financial Remedy Order.

The court process:

1. Application (Form A): Initiates proceedings.
2. First Appointment (FDA): Case management hearing where financial disclosure is reviewed.
3. Financial Dispute Resolution (FDR) Hearing: A ‘without prejudice’ hearing encouraging settlement.
4. Final Hearing: A judge decides how assets are divided.

Throughout this process, parties are encouraged to settle before reaching the final hearing, which can be costly and time-consuming.

For detailed guidance, visit the UK Government’s financial order page.

Factors the court considers in a financial settlement

Under Section 25 of the Matrimonial Causes Act 1973, the court must consider various factors when resolving divorce financial settlement UK disputes:

• Children’s welfare (first consideration).
• Length of the marriage.
• Age and health of the parties.
• Income, earning capacity, property, and resources.
• Financial needs, obligations, and responsibilities.
• Standard of living during the marriage.
• Contributions made by each party (including homemaking and childcare).

There is no set formula – the court’s aim is to achieve fairness, not equal division.

Consent Orders: Making agreements legally binding

Even if a couple resolves their financial dispute outside court, they should apply for a Consent Order to formalise the agreement. A Consent Order:

• Must be approved by a judge.
• Is legally binding and enforceable.
• Prevents future claims (especially important in “clean break” cases).

Solicitors can help draft the order to ensure it meets legal standards.

Benefits and drawbacks of financial dispute resolution options

Informal settlement (e.g. Mediation)

Benefits:

• Less expensive.
• Quicker resolution.
• Preserves relationships.

Drawbacks:

• Not enforceable without a Consent Order.
• May not work if communication is poor.

Family Court

Benefits:

• Enforceable outcome.
• Judicial oversight ensures fairness.

Drawbacks:

• Costly and time-consuming.
• Public record (unless privacy orders are made).

Arbitration

Benefits:

• Private and faster than court.
• Binding decision.

Drawbacks:

• May involve additional legal fees.
• Limited appeal rights.

Future Outlook: Digital dispute resolution and reforms

The UK’s family court system is undergoing reform, with increasing emphasis on out-of-court settlements and digital resolution tools.

Expect to see:

• More online mediation services.
• Streamlined e-filing for financial remedy applications.
• Expansion of Family Hubs to offer early legal guidance.

Expert Support

Our specialist Family Law Solicitors can help advise and support you in understanding your legal rights and responsibilities, and can provide expertise with regard to settlements in the case where agreement can be reached, or when it can’t and court representation is required. We work with our clients closely to fully understand their individual circumstances and needs to be able to advise and support them in the best way possible. Making financial arrangements can be complicated and result in disagreement. Our experts are experienced in assisting and mediating between parties to try and deliver the best possible outcome for our clients.

Contact us for more information.

FAQ

What is a financial settlement in divorce?

A financial settlement refers to the division of assets, property, debts, and financial responsibilities between separating partners. It includes spousal maintenance and financial arrangements for children, excluding child maintenance which is calculated separately.

Do I need to go to court to get a financial settlement?

No, many financial disputes are resolved through mediation or negotiation. However, if an agreement cannot be reached, either party can apply to the Family Court for a Financial Remedy Order.

What factors does the court consider in financial settlement disputes?

The court considers children’s welfare, the length of the marriage, income, assets, standard of living, and contributions made by each party. The goal is to reach a fair, not necessarily equal, outcome.

Is a consent order necessary after a financial agreement?

Yes. A consent order makes your agreement legally binding and prevents future claims. Without one, either party could return to court in the future.

Can financial settlements be changed after the divorce?

In some cases, yes – particularly if there has been a significant change in circumstances. However, a clean break consent order generally prevents future claims.

This article was produced on the 20th June 2025 for information purposes only and should not be construed or relied upon as specific legal advice.