Do you need a solicitor to help with financial disclosure process in mediation ? - Article 3 of 5

Before you and your former partner are likely to feel willing and able to explore your financial options in mediation, you will need to feel satisfied that you have a full financial picture or, as your solicitor may put it, a ‘full and frank’ financial disclosure.

You will find this article in video format here if you prefer to watch and listen rather than read.

The objective of a full and frank disclosure is different in every circumstance and is something I talk about in much more detail in my video series- Full and Frank disclosure Q&As, available to our clients

In this video, I want to talk about your solicitor’s role, at this stage of the 'supported mediation' process, and how they might best support you and the mediation process.

Having worked for many years as a mediator and solicitor, in the field of complex financial circumstances, I have experienced far too many mediations fail before they ever get off the ground, because of mistrust and suspicion, fuelled by a belief that the other person is reluctant to disclose their information or is hiding something.

From my experience, an apparent reluctance to disclose information can often be driven by the a number of factors, such as

·        feeling forced down a route you do not want to go, especially if you don’t want to divorce. Very few people feel co-operative when feel controlled or forced to do something.

·        feeling, for example, that the person asking for the information is not genuinely interested but is simply fishing for information or wanting to punish you or

·        Quite simply the way, the information is being requested or, as it is perceived, demanded.

Whatever the reasons for the reluctance, surely the problem-solving question to focus on is this;

What needs to happen or change in order to reduce any feelings of vulnerability, mistrust and suspicion, so that you can both get on and deal with the necessary financial disclosure process in a co-operative and collaborative way.

So often it is not what is being asked for but how it is being asked for that people object to. If so, this should be easy to remedy, shouldn’t it, if any request you make for information is specific, polite and respectful explaining specifically what you want and why it is important for reaching a fair outcome?

One simple answer is for each person in mediation to be willing and open to working with their solicitors and co-operating with each other’s solicitor, to ensure that the financial disclosure process is robust, providing confidence, to everyone involved, that things are not been hidden.

Let’s face it, it would be very foolish indeed to hide anything bearing in mind that;

·        Firstly, this would have the effect of undermining the mediation process and continue to fuel suspicions, unnecessarily and

·        Secondly, if the matter goes to court, the family law judge has very extensive powers to ensure that a full and frank financial disclosure is made by each person (and make costs orders against the 'reluctant party'), and

·        Thirdly, if an agreement is reached and a court order made, based on an incomplete financial picture, there is a chance that the order will simply be overturned.

So, rationally speaking, what on earth would be the point!

Having agreed the importance of making a full and frank disclosure, how can the mediator, solicitors and clients work together, in a supported mediation process, ensuring that a full and frank financial disclosure is made so that a draft open financial summary can be created in mediation by the mediator, as quickly and cost effectively, as possible.

Here is my suggestion;

Stage 1-Each person does their best to complete their financial disclosure booklets and obtain the correct supporting evidence, using the Compass video series and online programme of guides and documents- how to reach your financial agreement- with the minimum of solicitor support, at this stage, unless particularly complicated.

Or, in a few circumstances, use some other appropriate format, as discussed and agreed with the mediator, in the pre-mediation meetings, such as excel spreadsheets, in order to keep the process really simple, where appropriate.

Stage 2- Each person works together with the mediator, during the first mediation session, to help the mediator produce a draft open financial summary, asking each other questions in mediation, about the facts and figures, as they are disclosed, which is managed by the mediator.

When a client says to me in mediation ‘ I am not happy that X has disclosed A or B’ , my reply is usually, ‘ What would satisfy you or what do you need to see, to be satisfied’ and then go on to agree a list of information and evidence for each person to produce for each other, before the next session. Simple really !

There is little point getting to the end of the mediation process, having reached an agreement, only to discover that you or your solicitor wants/needs more information. How frustrating would this be, to say nothing of the extra legal costs you would incur ?

Stage 3- It is then important for each person and their solicitor, if they have one, to have time to reflect on the draft financial summary and ask for additional information and evidence from each other, with an agreed timeframe to produce it, between the first and second mediation session.

During this stage you might also need your solicitor’s help to obtain a pension report or business valuation (see my online series on pensions and divorce and business interests and divorce).

Let me add one note of caution here.

If you and your solicitors get into difficulties during this stage, sending letters backwards and forwards, please, please, please get back into mediation, as soon as possible, where the mediator can do their job of containing and diffusing any conflict, refocusing you both on finding solutions to any impasse.

I emphasise this because I see far too many mediations falling apart, at this stage, because one or both of the separated couple, and in some cases the solicitors, respond defensively to what they consider to be unreasonable demands being made of them.

Again, please think about how you ask for information and documents, ensuring that this is perceived by the other person as a specific and respectful request and not a blunt demand.

Stage 4- Each person then returns to mediation with the evidence and information they have provided to each other and the solicitors, so that the mediator can update the financial summary.

It is important that this process of collecting financial information and evidence is centralised around the mediation process, containing and diffusing any conflict, enabling the mediator to manage the process of updating and completing the financial summary in mediation, with the clients, so that they can get on and begin to explore their financial options.

This 4- stage mediation disclosure process should give each person and, significantly, their solicitors, the opportunity to satisfy themselves and each other that they have all the information and evidence they need BEFORE the mediation moves onto the next stage, which I cover in the next video- exploring options.

If each person and their solicitors agree to follow this 4 stage process, within a reasonable timeframe, there is no reason why any mediation should break down over the financial disclosure process.

In the next article in this series, I look at your solicitor’s role in helping you to explore your financial options with the aim of reaching a fair financial outcome.

Thanks for reading and watching, if you watched my video.