29th July 2014
Kitchen Table Diplomacy: is this the secret to a quick divorce?
Instinctively, it sounds like a very sensible idea for a separating couple to sit down together at the kitchen table and to try to sort out all of the issues that their separation will cause. In fact, I would go so far as to suggest that for the vast majority of separating couples this would actually be a very sensible first step to take, especially when there are children’s lives to consider. Afterall, this would be a massive improvement on ending up as separated spouses who are unable to be in the same room as each other, either as individuals or as parents, including at weddings and school events. When you add in the financial cost of entering into costly legal battles as a result of failing to reach sensible agreements about the future of the marriage, the children’s arrangements and financial settlements, then the kitchen table route appears to tick all the right boxes.
However, in a similar way that the use of seemingly cheap divorce packages can be very damaging in the long-run (see https://www.godalmingfamilymediation.co.uk/divorce-beware-quick-fix/ ), kitchen table diplomacy can be fraught with danger when it comes to reaching a fair and lasting financial settlement and here are some examples of the issues that I have come across over the years as a mediator:
1. What about the pensions?
This is the classic scenario where the obvious assets, including the former family home, and the debts have been discussed between the parties but with no thought having been put into either the existing pension plans or each person’s ability to add to their pension pots in the future.
2. Did someone mention spousal maintenance?
Far too often, clients contact me to say that they have reached an agreement about the assets (perhaps even including the pensions on some occasions) but that they hit a slight block in the road when one party said that they felt that there should be ongoing maintenance payments whereas the other party has said that they believe that there should be a clean break. Approaching the finances in this way can be counter-productive as it can prove very difficult for both parties to step back from their skeleton agreement and realise that it might be necessary to either consider a radical change to the asset split or a potentially significant amount of ongoing spousal maintenance in order to allow a lasting agreement to be reached. Far better to step back and take a holistic approach much earlier in the discussions.
3. Shake hands and walk away
There is a common belief that separating couples can shake hands, or draw up a short summary of proposals, and then simply move on with their lives. Not only does this not factor in the fact that any “agreement” reached in this way could be unravelled in the event of a future divorce but it also fails to address the fact that some issues, such as those relating to the aforementioned pensions and spousal maintenance, can only actually be dealt with effectively when there is a court order made about them and this can result at a later date in either an expensive legal battle or a realisation that a very costly mistake has been made (e.g. in the event of one party’s death or when it comes to dealing with capital gains tax following the sale of a property).
4. Lack of transparency
Often I find that kitchen table discussions have been based upon inaccurate or incomplete information which clearly makes it impossible for any decisions to be properly informed ones but even when both parties have been completely open with each other it can be very difficult for there to be sufficient trust, particularly bearing in mind that the separation may have been at least partly caused by a lack of trust, to enable them to actually reach an agreement. The involvement of a third party who ensures that there is a transparency can be worth its weight in gold when it comes to reaching a lasting agreement.
5. Complex assets
Unless both parties are financial advisors who regularly deal with divorces, it is very unlikely that it will be possible for informed decisions to be made about complex financial assets such as pensions, business and share options without seeking specialist help which may include the preparation of a pension report or the obtaining of a business valuation.
6. What do we do with the agreement?
Even if a separating couple feel that they have been able to navigate through all the issues mentioned above, with both parties realising that it would be sensible to avoid the “shake hands and walk away” scenario, this still leaves the issue of what to do with the agreement that has been reached. On these rare occasions, it is my experience that as soon as both parties seek legal advice about how to turn the proposals into a legally binding agreement then the solicitors will start to spot loopholes and flaws in the agreement, which is their job afterall, which inevitably leads to a slow unravelling of the agreement followed by the very difficult task of renegotiating the terms of the agreement. In the event that the parties manage to find solicitors who will not start to unravel the agreements, possibly via a disclaimer to say that they has acted in an instruction-only rather than advisory capacity, this still leaves the problem of demonstrating to the court that full and frank financial disclosure has taken place (or explaining why this has not taken place) or facing the draft order being sent back by the court until it is satisfied that due process has been followed.
So, where does this leave kitchen table diplomacy?
Unless both parties are clear that there are no complex financial issues to discuss, and no children’s needs to consider, this article will hopefully help anyone who is facing a divorce to appreciate the benefits of seeking some external assistance with navigating through the complexities of reaching a financial settlement. This does not mean that I am advocating a knee-jerk reaction towards appointing legal teams to spend countless hours negotiating on your behalf, just that you should consider contacting a local mediator to see whether mediation might be helpful and to see whether you might also benefit from seeking legal advice in parallel with the mediation process – you might find the “Is Family Mediation a threat to Solicitors?” article helpful when trying to understand the way in which mediators and solicitors can work together to help you to reach robust and lasting solutions in the most cost-effective and amicable way possible.
I hope that this article is helpful to anyone who is considering kitchen table diplomacy and I look forward to reading your comments and questions.
Euan Davidson – please click for more information about the author
Godalming Family Mediation