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Consensus maker

Relationship breakdown can be a traumatic experience whenever it happens. In the current economic climate, when resources are already under strain, conflict over the division of the assets or the arrangements for any children through adversarial court proceedings only makes life more difficult.

As a result, clients are increasingly opting for a new alternative to litigation, which can be used to resolve all issues flowing from separation in a holistic way.

Collaborative law is a process whereby a couple and their lawyers (who are specially trained in collaborative law) engage in a series of open and constructive discussions to find fair and practical outcomes for the benefit of the family.

Why collaborative law?

Collaborative law is a dignified and sensible way of resolving issues when relationships break down. It focuses on achieving realistic and lasting solutions for the families involved.

The process encourages mutual respect and avoids confrontation. It is geared to finding agreements that fit both parties and is led very much by them and what they want to achieve rather than the deployment of lawyers’ tactics and negotiation skills.

The parties and their lawyers enter into a binding commitment to resolve all matters without involving the courts.

It involves a series of meetings where everyone – the couple and their lawyers – are present. During the course of those meetings, the lawyers will help to ensure that all relevant information is on the table, to advise when necessary, and to manage the process of moving their clients towards agreements that are workable, fair and acceptable to both parties.

The rationale is that a couple are more likely to adhere to solutions that they have reached through discussion and consensus rather than ones imposed upon them after a lengthy and acrimonious battle through the courts.

They are also far more likely to be able to have a civilised relationship in future, which is especially important if they have children.

Collaborative law can also be a most effective way for a couple to deal with the often difficult and sensitive issues regarding the terms to be put into a pre-marital agreement.

How does it work?

Each party has an initial interview with a collaboratively trained solicitor to identify the objectives that are most important rather than considering strict legal rights and obligations.

This discussion will inform the anchor statement, which represents what each party is trying to achieve through the process of collaborative law, and is a useful reminder of fundamentally important issues if discussions become tense in meetings as the process progresses.

Assuming that both parties want to adopt the collaborative process, then a series of four-way meetings are scheduled between the parties and their solicitors. Between meetings, the solicitors will either meet or speak by telephone to discuss any particular issues that have been raised by their client.

The hallmark of the collaborative process is openness. It is not part of the process to ambush the other party by keeping information back, which would almost inevitably derail the process.

The collaborative process certainly is cfertainly not a “cheats’ charter”. The same requirements for full and frank financial disclosure apply as they do in traditional cases.

At the first four-way meeting everyone signs the collaborative participation agreement, which contractually binds the parties not to go to court with their collaborative solicitors other than simply to ask the court to ratify an agreed order.

The next stage is usually to marshal and audit disclosure but it is not possible to give definite rules for the number of meetings and their format beyond the initial stage.

Each case will progress at its own pace. This will be dictated not only by the complexity of financial issues but also by problems with children and, very significantly, the pace at which each party is emotionally able to move forward.

The last four-way meeting is used to tie up any financial agreement that has been reached into a formal document in readiness for its ratification by a judge.

Other than in exceptional cases, once the paperwork has been completed and signed, it is rarely necessary for the parties to attend a court hearing, and the draft order will normally be approved on paper.

At any stage in the process it may be appropriate to agree to involve in the meetings jointly instructed collaboratively trained experts, perhaps independent financial advisers or accountants, family therapists or children experts.

The important thing to remember is that the process is intended to be holistic and any problem that presents itself as such to either party needs to be addressed.

Benefits for independent advisers

In a traditional divorce, the investment adviser may provide support but in reality stays in the wings. Collaborative law is a very different experience.

A key feature is a more open, flexible and creative use of professionals such as accountants, pensions advisers and IFAs (known in the process as “third-party neutrals”).

Team-working with third- party neutrals forms a natural part of the collaborative process and ensures the right help is bought in when required.

The benefits include closer cooperation between professionals as well as opportunities to obtain new work and reinforce existing business relationships.

Investment advisers, for example, are often trusted advisers with detailed knowledge of the family and its finances. It is not uncommon for them to attend the second or subsequent four-way meeting to provide or clarify disclosure.

The open dialogue enables the adviser to explore how the assets may be reorganised to provide for the family in the changed circumstances following separation.

Having supplied information and advice, they can play an important role helping the lawyers to tailor a solution for both parties face to face.

Their expertise can be used for the benefit of all and, importantly, they are more likely to retain both clients in the future.

The accountant and family business

Although the same considerations apply to accoun- tants, they may have an added role to play in the collaborative process as it is particularly effective in resolving complex cases relating to family businesses involving both spouses or wider family or third-party interests must be considered.

In the traditional process, the scope for argument about businesses is considerable. Emphasis tends to be on the worth of the business and how much cash can be raised.

It leaves little opportunity for constructive discussion about what is best and realistic for both the family and the business.

The courts have limited powers to transfer assets or sell them or order capital sums to be paid. Often, such remedies are inadequate for dealing with the subtleties of a commercial enterprise with its shareholdings and competing interests.

Collaborative law allows a more flexible and holistic approach. The accountant can take into account the nature and relevance of the business as a resource in the context of all the wider circumstances.

In addition to pure valuation issues, the accountant can advise on issues of marketability, liquidity, restructuring, tax and alternative methods to raise capital or income.

Usually, this will result in a broader range of options to reflect the commercial realities behind the business and these can be explored in a four-way meeting with questions answered or information supplied immediately.

In face-to-face discussions, it is easier to consider long-term objectives of the business – is it going to e sold on retirement or continue for future generations? How can third- party interests be protected?

Using collaborative law, it is possible to use wider commercial remedies, such as weighted voting or shareholder agreements, to regulate the sharing of benefits. Such remedies, which bind third parties, are not available to the courts.

As appropriate, other professional advice can be sourced in respect of specialist areas like tax and pensions. Compared with a traditional divorce, there is considerably greater scope to find a solution to benefit the divorcing couple and the wider family.

What it needs to make it work

It is not the right process for everyone, nor is it a soft or necessarily cheaper option. The auditing of disclosure is as vigorous as in a traditional divorce and attending face-to-face meetings can be time-consuming.

As a guide, costs can be expected to run at the same rate as it takes to get to a financial dispute resolution appointment in the court process. The difference is that clients tend to consider it is better value.

It needs the right clients, with the right frame mind who have:

What makes it so successful?

In contrast to mediation, parties benefit from having their own independent legal adviser supporting them throughout the process. They are in control and without the stress of court proceedings hanging over them.

The couple set the agenda and pace, so the process is completely geared to suit their needs and priorities.

Usually, couples have the best understanding of each other and of finding the right solution. If children are involved, it helps to encourage communication, which helps with future co-parenting.

Most important, they make the key decisions about their future. This helps to achieve a process of transition rather than trauma.

If this overview encourages you to recommend collaborative law to your clients or to consider becoming trained in the collaborative process yourself please find out more by visit the website www.collabfamilylaw.org.u

To find out more about Resolution and family law in general, visit www.resolution.org.uk

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