December 2018

Rising legal fees drive divorcing couples away from court

Recent research by Aviva has revealed that the cost of divorce in the UK has risen by 17% in three years, with divorcing and separating couples now typically spending £14,561 on legal and lifestyle costs.

The report points to soaring legal fees, the cost of redecorating homes, as well as moving house, as the chief contributors to this rise. For example, those who rent – which applies to more than half of divorcees – spend around £35,000, while those who go onto buy a new property (16 per cent) spend £144,600 on average.In Scotland, there is also a 10% land and business transaction tax incurred when moving home, for properties valued £325k - £750k.

With so much financial pressure associated with court divorces, it is little wonder that avoiding the judicial system is a popular option these days. Our own research suggests that more Scots couples today are choosing an out of court divorce settlement, either through collaborative divorce, mediation, solicitor to solicitor or DIY methods. We also found that half of the people we asked who had got divorced in court, would choosecooperative methods next time round.

As with Aviva, our survey suggested cost was the driving factor, with most saying they avoided the courts to save money, and because it was quicker and easier to do so. Interestingly, on the point of convenience, we found that DIY divorces, which have been in the news frequently in recent months, were only adopted by a small minority of respondents, suggesting this method is not as popular as the media would suggest.

It is pretty clear to see why so many people are shunning the courts for more cost effective methods. According to the Money Advice Service, hiring a collaborative family lawyer costs on average £8-£10K, up 30% cheaper than a traditional court divorce. Other methods are even cheaper.

The majority of couples we asked said divorce had a detrimental impact on their long term financial situation, with many saying it could take between two and five years to settle their affairs. Aviva’s research supports this claim, with most people they asked taking 14.5 months to settle.

We also asked people how they managed to settle their divorce costs. Interestingly, most people paid their legal fees using savings or selling personal items,including some people who had to sell their home. Other methods included Legal Aid, personal loans and bank loans. Most said that legal fees were the most financially damaging aspect of court divorces, with division of assets a close second.

In addition to financial pressure, many people said divorce caused stress and anxiety to themselves and their family, including some who said it led to depression and mental health issues. Others even reported Post Traumatic Stress Disorder, and a very small minority said they were happier and healthier. Some said it put strain on relationships with family and friends, as well as affecting their performance at work.

New research conducted by University College London and the Anna Freud National Centre for Children, concluded that divorce has also been linked to higher rates of mental illness among children, particularly those from Caucasian families. Their joint survey asked 30,000 children between the age of 11 to 14 how divorce affected them. One in five suffered from mental health problems that required professional intervention.

It is arguably no surprise that we are seeing a trend towards out of court divorce settlements. The rise of alternative divorce methods such as collaboration, mediation and family arbitration, has given couples many more options. This factor, combined with the inflated cost of traditional court divorces, is driving many people to seek alternative methods that don’t incur the stress and cost of the judicial system.

As technology improves, we are likely to see a rise in DIY divorces, though there is a ceiling to this. DIY methods are only practical for couples that still have a relatively healthy relationship, and where the division of assets and care arrangements for children have already been agreed. The same can be said for mediation, family arbitration and other collaborative methods, where a fair degree of cooperation is required. In these cases, additional support is available in the form financial advice from a joint expert, support from family counsellors and also legal advice.

Having said this, court divorces aren’t going anywhere soon. In situations where there is high conflict, if positions are far apart or if there are complex financial or legal issues, getting matters settled through the courts is often the only option.

The provision of higher Legal Aid rates or other financial initiatives such as access to low interest loans, particularly for low income families, would go a long way to negate the stress and emotional turmoil that the divorce process can have on couples. Currently Legal Aid rates are so poor that many family lawyers will not take on the work, and there are areas in Scotland where it is difficult to instruct a Legal Aid lawyer.

Free Parenting Apart classes run by Family Mediation and Relationships Scotland throughout Scotland should also be made available to provide emotional support for couples and their children, in the aftermath of divorce.

There’s no doubt that the financial and emotional fallout associated with traditional court divorces is causing long-term challenges for couples, and this is contributing to people’s decision to seek collaborative methods that save on money, time and reduce stress. As costs continue to rise, and alternative methods of divorce become more readily available, we’ll see this trend continue indefinitely.

Get in touch to find out how to separate and divorce without confrontation.

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