The true cost of divorce

It is difficult to work out how to approach an article about the true cost of divorce.

For example, it would be possible to spend time discussing the emotional cost on both parties (as well as other people who might be affected, including any children), with this emotional cost generally increasing in line with the breakdown in trust and communication that is often associated with drawn-out legal disputes relating to a divorce.

It would also be possible to consider this from the perspective of the financial damage that is caused to a couple when they decide to separate, resulting in them needing to spread their assets and income much more widely in order to pay for 2 houses and separate lifestyles.

Each party to a divorce as also likely to have a view about how those assets and income that they consider to be their “own” ending up being shared with the other person, thus resulting in what they perceive to be an unfair cost. For example, any money from a recent inheritance might need to be shared with their spouse as well as part of their future income even after a divorce has been finalised.

Whilst all of the above issues are very important ones to examine when considering the true costs of a divorce, the aim of this article is to focus purely on the actual costs associated with the divorce process itself as I feel that these are often very unclear when the divorce process is started.

Part of the problem with addressing the issue of divorce costs is that in some ways this is similar to trying to establish the length of a piece of string as it is possible to spend anywhere from hundreds of pounds to tens of thousands of pounds on a divorce. To understand this, I will try to examine some typical scenarios for managing the divorce process:

1. DIY divorce

Whilst the removal of most forms of legal aid has essentially ended the possibility of a government-funded divorce, it is still possible to run the divorce process yourself. This will mean that the only costs associated with the divorce process are the court fee (which went up in July 2013) of £410, that now covers the full divorce process but that needs to be paid at the start of the process, and some minimal photocopying/postage costs. Whilst it is always advisable to consider whether independent legal advice would be appropriate, especially when there are children and complicated financial issues to discuss, there is no reason why someone who is comfortable with filling in forms and reading guidance notes should not consider a DIY divorce as an option if saving money is the priority and a very helpful government website can be found at https://www.gov.uk/divorce/overview

2. Online divorce websites

In recent years there has been an explosion in the number of companies offering to run the admin side of the divorce process via online websites, with some of these offering a divorce from as little as £37, although you will of course need to pay the £410 court fee and, if the divorce process does not go through as smoothly as hoped, you will then need to decide who to turn to for advice. Whilst I have had a number of clients who have used these websites with apparent success, this is only once the divorce process itself has been agreed in mediation, and it is important to consider whether you want to put something as important as a divorce in the hands of a faceless website rather than choosing to undertake a DIY divorce or instructing a solicitor to manage the divorce for you.

3. Fixed fee divorces

There has also been a growth in recent years in fixed fee divorces being offered by solicitors and it is likely that the competition in this area will become even fiercer in the coming years, thus leading to further reductions n the fixed fees. The advantage of these fixed fee arrangements is that you have some level of transparency with the fees involved but you will need to make sure that the £410 court fee has been included and check how the costs are likely to change if the divorce process is less straightforward than hoped e.g. if the other party defends the divorce or does not engage in the divorce process. If you choose carefully, then you should be able to find a suitable solicitor to process a straightforward divorce for somewhere between £1,000 and £1,500 including court fees.

4. Open ended divorce fees

When you instruct a solicitor to run the divorce process that is not on a fixed fee basis,  it is vitally important that you ask for clear guidance about costs and that you ask to be updated if it looks likely that the initial costs estimate will be exceeded. Failing to do this will leave you open to running up bills of thousands of pounds as your solicitor writes letters, makes phone calls and runs up additional costs at an alarmingly high rate, especially if there is any suggestion that the other party (0r their solicitor) is not in agreement with running the divorce process the way that your solicitor wants to run it. Ultimately, this could result in a contested divorce that costs each party tens of thousands of pounds,

Whilst the general examples above give a flavour of the choices that you have when considering a divorce and their respective costs, the big problem here is that all of these choices are designed purely to result in a divorce, thus meaning that there are often issues relating to the caring of any children that are unresolved.

Also, it needs to be understood that, unless a separate application is made for finances to be considered, you will not have resolved any issues relating to the finances, such as the ownership of the family home, the division of pensions and whether or not there should be future maintenance payments from one party to the other. Failing to address these issues at the time of divorce means that the window for one party to apply for a finance order remains open for many years and can lead to punishing legal bills in the future, not to mention the fact that it is likely that one or both parties will be in a financially vulnerable position without a court order to enforce any financial agreements that might have been reached either explicitly or implicitly.

It is therefore vitally important that you ensure that the finances (and children’s arrangements) are carefully considered during the divorce process and it is here that the true costs of divorce start to emerge. It is extremely difficult for the parties themselves to properly address the finances as the laws relating to finances are complex and there are many pitfalls to be avoided, with it being likely that the end result will either be one that is highly favourable to one party or one that damages the finances of both parties. It is also extremely difficult, if not impossible, for these issues to be dealt with by any online website or by any fixed fee package, as each situation will be unique, leaving just the option of open ended fees with solicitors and it is here where the true costs of divorce will become apparent. Some fortunate people who choose their solicitor carefully may receive all the advice and assistance that they need for a few thousand pounds each but there is a risk that the bills will exceed £10,000 per person and potentially go a lot higher, especially if any court intervention is required.

Of course, this is where family mediation can and should play its role. It should be possible for a suitably trained and experienced mediator to guide both parties through the divorce process (but with the parties completing their own paperwork or using one of the other options above once the divorce process has been agreed in mediation) and to, in the vast majority of cases, assist them to reach agreements about the children’s arrangements and the proposals for a full financial settlement, at a fraction of the cost that would be incurred between solicitors. It is likely that both parties will benefit from receiving some independent legal advice in parallel with the divorce process, as well as there being a need for any mediation proposals to be turned into legally binding agreements (or court orders) by a solicitor, but these legal costs should be comparatively very small.

Whilst each case is going to be different, from my experience it should be possible for all of the issues to be addressed properly within the mediation process for somewhere between £500 t0 £1,500 per person, with then just the court fees and some specific legal costs to add to this, giving a total cost of somewhere between £1,000 and £2,500 per person for the full process (but with there being additional costs involved if financial advisers or other experts are instructed during the process). As a mediator, I am aware that these costs are still significant for most people but I am also very aware of how much money will have been saved by both parties if they are able to reach agreements via the mediation process. I hope that this article goes some way to help others to become aware of the potential costs of divorce and to then enable them to make informed decisions about how to approach a possible divorce in the future without suffering from large legal bills or other unexpected and unnecessary costs.

Thank you for taking the time to read this post and I look forward to reading your comments.

Euan Davidson

Family mediator

Godalming Family Mediation