Pensions and investments or how to turn Pensions into Porsches

April 4, 2014 in Pensions, Uncategorized by Alan Larkin | No comments

Pensions into porsches Sam Jermy

GUEST POST FROM SAM JERMY

 

Turning Pensions into Porsches

I usually refrain from posting my reaction and opinion on a budget until at least a week has passed.  This provides some time to ponder and digest the detail; much of which only becomes clear post budget day.  In this blog post I will focus on the largely unexpected reforms being made to money purchase pension funds.

Over the week we have witnessed attention grabbing headlines such as describing the budget as the death knell for annuities. Lib Dem Steve Webb’s comments regarding his relaxed stance on people purchasing Lamborghinis with their pension funds has provided plenty of substance for debate. I now wait with nervous anticipation for marketing slogans such as “We Turn Pensions into Porsches”.

The proposed pension reform includes changes that were implemented from 27th March 2014.  These include a higher maximum income available from Capped Pension Drawdown, a lower Minimum Income Requirement for Flexible Drawdown and a higher lump sum figure available under Triviality Rules.  Ditching the technical terms, these changes basically mean.

People electing to drawdown their pension fund rather than buying an annuity will be able to take a higher annual income than that available previously.  For example, a 65 year old can draw a maximum of £8,850 p.a. from a fund of £100,000.  

People with secure pension income totalling at least £12,000 p.a. from sources such as the State Pension and a guaranteed annuity can now elect to have full flexibility on how much they draw from an invested pension fund.  

Pension benefits can be withdrawn from age 60 as a lump sum for funds totalling £30,000; individual pension pots can be withdrawn as a lump sum for pension pot values up to £10,000.

As is typically the case with pensions, the above rules are all subject to complex qualification rules, commencement dates and restrictions.  Professional advice should be sought before any action is taken.

The more dramatic changes to pensions will take place from April 2015.  From this point, people over 55 years of age will have full flexibility in how much they drawdown from their invested pension funds and will not be subject to the above limits and restrictions.  Note, the minimum pension age is proposed to increase to 57 in 2028.  Whilst in theory a full drawdown seems attractive, the tax implications of large one-off withdrawals may make it less so.  With only up to 25% of the withdrawal being free of tax, it is important to take into account marginal tax rates and any potential loss of personal allowances. 

This future flexibility for pensions and investments has led to a fierce debate as to whether people can be trusted not to blow their pension pots in one go.  The government’s stance is relaxed on this point as the introduction of the single-tier state pension is broadly at the level for means-tested benefits. Squandering a personal pension fund should not provide people with the means to claim additional state benefits. This does seem like an odd stance considering the government’s drive behind encouraging personal and workplace pension provision.

I do provide financial planning guidance to clients who have accumulated pension funds that are surplus to their lifetime income requirements.  They are a small minority however. The vast majority of my clients are greatly dependent upon their pension funds to support their basic spending needs and lifestyle aspirations.  Financial security during their retirement years is the key priority for most. For this reason, annuities should still have their place as they can offer guaranteed income levels for life.  That said, I would expect to see significant innovation in the annuity market and increased competition to win annuity business. All positive news for the consumer.

There has also been talk of a ‘Buy to Let’ bonanza fuelled by people fully withdrawing their pension funds and investing into property.  Again, what seems like a good idea in theory, in practice, may not be so.  The tax liability on pension withdrawals, property purchases (Stamp Duty Land Tax) and the tax on rental income may result in a less than attractive overall net rental yield.  The numbers need to be fully ‘crunched’ to determine the suitability and benefits of this option. 

Other considerations include the pros and cons of holding investments within ISAs vs. Pensions. Watch this space for the next blog on this specific subject and have a look at my previous post on Divorce Finance Toolkit on the subject of state pension changes.

The implemented pension changes and forthcoming reform gives people greater flexibility to make their own choices regarding when and how to draw their invested pensions. With so many variables at play such as tax, investment risk, inflation risk and liquidity; planning becomes essential. A qualified financial planner can provide guidance and assistance to help people make informed decisions and achieve financial security in retirement.

 
Sam Jermy works for Family Law Financial Planning Ltd which is an appointed representative of North Laine Financial Management Ltd which is authorised and regulated by the Financial Conduct Authority. North Laine Financial Management Ltd’s FCA Register number is 446522.  The views expressed in this guest post are Sam’s own. Please contact your own independent financial adviser or family lawyer if you believe the issues raised by Sam impact upon you. Alternatively, please post a comment or query below and Sam will do his best to respond.

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Conduct in divorce cases

February 3, 2014 in Legal services by Alan Larkin | No comments

the relevance of conduct in divorce financial proceedings

GUEST POST: LISA BURTON-DURHAM

Conduct in divorce cases often raises its head as an issue when family lawyers are first consulted.  To most clients, it seems clear as day that since their spouse is at fault in some way, it must follow that this will impact on the financial outcomes in the divorce settlement.

I asked one of my colleagues at Family Law Partners, Lisa Burton-Durham, to let me post an article she has recently written on this enduring issue.  I think my readers will find it of great value.  Thanks, Lisa!

Conduct in divorce cases

I am often asked whether a spouse’s behaviour would have an effect upon the financial settlement following a divorce.  Indeed there is a common misconception that one person’s ‘bad’ behaviour will mean that their spouse will receive a larger financial settlement by way of compensation for one and penalisation for the other.  But is that right?

Conduct is one of the factors that the court should take into account when looking at the appropriate financial settlement within divorce proceedings.  However the law is very clear in that the conduct will only be taken into account if it is so serious that it would unfair for the court to disregard it.

Of course, deciding on whether conduct is such that it should be taken into account will be subjective to many.  I often hear: “It was my husband who went off with someone else so why should he get anything?” or “She recklessly gambled away lots of our money so why should she get half of my assets?”

When looking at the relevance of conduct there are two types to be considered: personal misconduct and financial misconduct.

Personal misconduct involves some sort of ‘bad behaviour’ on the part of one party. In my experience it the type of misconduct that is complained of the most but it is actually very rare that it will have any bearing upon the financial settlement.   Adultery and most forms of ‘unreasonable behaviour’ will probably only be relevant when deciding who should pay the costs of the divorce.

To be a relevant factor in a financial settlement, personal misconduct has to be of a very serious nature and outside the range of normality.  Ordinary fighting and quarrelling in an unhappy marriage would not be sufficient neither would one party having committed adultery.  Examples of cases where personal misconduct was taken into account include a wife shooting her husband and a husband committing incest with the children of the family.  Thankfully, these types of cases are extremely rare.

Financial misconduct is normally where one party recklessly or purposely squanders assets prior to the divorce proceedings, thereby reducing the amount of the ‘matrimonial pot’.  Examples of this are gambling and spending money on unnecessary things like expensive holidays and cars. 

In such circumstances the court will try to put right the circumstances by ‘adding back’ the money or assets that have been spent and continuing on the basis that the party still has them.

It is also important to note that conduct during the course of the divorce proceedings, such as failing to comply with a court order, is not usually punished by providing a lower settlement to the ‘guilty’ party.  However they can be penalised by the court ordering that that party pay a contribution towards the other party’s costs.  This is known as ‘litigation conduct’.

To summarise, it is quite unusual for a conduct claim to be successful, especially if the misconduct is personal.  It is therefore very important that legal advice is sought before embarking on such a claim as this could save considerable expense in the long run.

Lisa Burton-Durham is a Chartered Legal Executive and accredited collaborative lawyer with Family Law Partners based in Brighton.  Nothing in this article constitutes legal advice.

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Taxing access to justice

January 25, 2014 in Alternatives to Court, Legal services by Alan Larkin | No comments

Another (austerity) budget

Tax policy to incentivise mediation

I have often wondered, when sending my clients their legal bills, how on earth they can afford my services?  In short, how can they afford access to justice?  The cost charged for the work  carried out will look imposing enough.  But the killer touch is when VAT at 20% is added to the bill.  A stiff bill becomes a….really large bill.  This is important because most legal aid for family work has now been kicked into touch.  “Access to justice” is no longer a slightly dry form of words bandied around by academics or politicians.  It is real and it affects us all because it you can’t afford to pay for it, you ain’t getting it.

When providing costs estimates to clients at a first consultation the figure arrived at will be discussed and agreed.  A client will be encouraged to help themselves as much as possible, or use my online platform for document production: anything to keep the cost down.  So an estimate is arrived at and the client thinks: OK, I’d rather not be using my money to pay legal bills but I need the help and I can live with that likely cost.  Then comes the point when you have to add in VAT at 20%.  The client’s face always drops.  (Mine would in their position).  Adding in VAT at 20% has just broken the bank.  There is access to justice – you just have to clear the VAT hurdle first.

This post was first created as a draft over a year ago and then put in mothballs.  I’ve brushed off the cobwebs and published it now,  prompted by an article in The Law Society Gazette about Belgian lawyers resisting the imposition of VAT on their bills.  Not the sexiest of links I’ve stuck in a post but try to bear with me.

The problem with VAT

The imposition of VAT on legal services does not create a level playing field.  Because:

  • If a VAT registered company needs legal services (and think of the millions spent by large corporates every year on their legal needs) they can reclaim the VAT they have paid out so it is cost neutral for them.  Sweet.  So spend all you like, lads, on that latest merger.
  • If you are an individual you pay 20% VAT on top of your legal bills and can’t reclaim it from anyone.  Harsh.  So you can’t afford to get legal advice on access to your kids or financial agreements to keep a roof over your head, after all.
  • Some of my clients are individuals and don’t pay a penny of VAT on their bills.  (No way!)  Yes way.   Because they live abroad in non-EU member states and therefore don’t have to pay VAT on legal services even though the legal services are being conducted in the UK.  Fortunate for some.

I mean, I understand there has been (still is) a recession: the government needs these tax receipts. But access to justice should mean something: the government has taken the axe to civil legal aid and promoted mediation.  Unfortunately, the government’s championing of mediation was a fig leaf to distract from the legal aid cuts.  The catastrophic fall in mediation referrals is testament to the fact that the presentation of mediation as a panacea in family law work was political window-dressing rather than well-considered, appropriately resourced social policy.

If the government is serious about the promotion of mediation, and is equally serious about preserving access to justice, then I have a suggestion by which it can redeem itself, ever so slightly. My suggestion focuses on family law.

The solution

We all know that a blanket tax, like VAT, penalises the less well-off.  We also know that the government keeps banging on about mediation whilst doing nothing (in resource or policy terms) to promote its take-up.  Talking of policy, they really need to catch up with the fact that there are other options available to keep people out of the courts as well, such as collaborative law and family arbitration.  We know, despite the political window dressing, that the withdrawal  of civil legal aid has directly and adversely impacted upon  many individuals’ rights of access to justice – they can’t afford it – full stop.

So, here is my suggestion to help the government climb halfway out of the hole of its own making.

  1. Spend a few quid telling the public that legal aid is still available for mediation (on a means tested basis);
  2. Permit mediators and lawyer/mediators to reduce the rate of VAT on their services to 5%;
  3. Permit collaborative lawyers to reduce the rate of VAT on their services to 10%.  Family consultants and financial neutrals assisting the parties in the collaborative process be allowed to do the same.
  4. Impose a reduced rate of VAT at 15% on legal advice offered outside mediation or collaborative law.  This would apply to family arbitration, and work conducted under the pre-action protocol (attempting via solicitor-led negotiation to resolve matters without recourse to court proceedings).
  5. Impose 20% VAT on legal services from the moment one of the parties issues contested legal proceedings.  An application for a consent order (so not really contested) would attract VAT at the rate of 5% if it follows on from mediation and 10% if it arises following the collaborative process.

In my humble opinion, I think this is a win/win scenario.  The lawyers don’t get a penny extra, so the Daily Mail won’t get its knickers in a twist.  It will make legal services  (access to justice) more affordable.  It will incentivise individuals to choose dispute resolution models such as mediation and collaborative law that objectively produce better outcomes at lower cost.  The reduction in VAT receipts will be offset (I’m guessing) by the drop in numbers using the (expensive to maintain) family court system and perhaps even reverse the increase in litigants in person that is now threatening the bring the courts grinding to a halt.  Timely legal advice can prevent a host of problems later on and I don’t know how you even begin to count the cost in developmental and emotional terms for those kids whose parents cannot stop warring without legal intervention, or who don’t receive maintenance or the opportunity to develop a relationship with a parent who has been excluded from their lives.

Worth a punt?

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Inheritance Act Claims

January 10, 2014 in child maintenance, spousal maintenance, Uncategorized by Alan Larkin | No comments

 Inheritance Act 1975

My virtual post bag brings me a very sad enquiry involving potential Inheritance Act claims. I will refer to my enquirer as ‘C’ – who tells me:

My ex husband died by suicide a couple of weeks ago, I have custody of our 2 children 14 and 16 years old. We had a maintenance agreement for many years, however last year he lost his job so my maintenance payments stopped. However in our divorce/maintenance papers it states that a provision has to be made in his will to support his children should he die.

Now I have never seen his will and have no idea what it states or even if there is a will. He remarried a few years ago. I nor my children has NO relationship with his wife to the point where his children have not been invited to his invitation only funeral. Due to the lack of maintenance for the past year I have no funds to engage a solicitor to help me, so I have been reading as much as possible online where I came across your site. How can I

1) Find out if a provision in his will for his children has been made

2) What can I do if there is no provision or will?

I know you cannot give me personal advice but any suggestions of where I can start would be gratefully received.

What an awful situation for all involved.  It is particularly sad to read that C’s children will not have the opportunity to say goodbye to their father at the funeral. The death of a parent at their age will be very hard on them and the particular circumstances of the death doubly so.  I sincerely hope that the children will be able to make their farewells in due course in a manner appropriate and helpful for them.  C and her children may obtain assistance from the Childhood Bereavement Network which has a helpful directory of local services across the country.

Inheritance Act Claims

As C recognises, I don’t provide legal advice on this blog.  And, in this case, as in so many others, I am not in possession of all the information.  But I can make observations of a general nature which may help C, her children, and others who find themselves in similar positions.  It is likely that a number of potential Inheritance Act claims arise.  By Inheritance Act, I am referring to the Inheritance (Provision for Family & Dependants) Act 1975.  Have a look at my previous post on a query involving the Inheritance Act for more details.

  • It appears that that both C and her children could have Inheritance Act claims. But, in relation to C, she may only make a claim if she has not re-married. C may claim because she is an ex-spouse of the deceased who had the benefit (even if not being paid) of a spousal maintenance agreement still in existence at the point of death.  The children had child maintenance agreements of some sort.  It is, of course, very important to know whether the maintenance agreement was a private arrangement between C and her ex (perhaps in the form of a deed) or whether the family court gave an order, even by consent, setting out the terms of the maintenance payments.
  • The fact that the deceased may not have been making payments before and at the time of death does not stop C making a claim on her own behalf as a dependant.
  • C’s children, being minors, would need a Litigation Friend (someone who can step into their shoes for the purposes of legal proceedings) in order to take advice about any possible claim or to ask solicitors to take steps on behalf of the children in any court proceedings.  It is likely that C could also act as Litigation Friend in any proceedings on behalf of her children.  There can sometimes be a potential for a conflict of interest between a parent who is claiming against an estate and that parent’s children who are also claiming.  This may mean in some cases that there are separate solicitors for the ex-spouse and her children.  And the Litigation Friend may be another relative who can exercise judgement independent of the parent.
  • Whilst the court may allow Inheritance Act Claims to be brought, it does not mean that they always succeed.  Crucially, much will depend upon the size of the deceased’s NET estate (i.e., what is left after all the debts have been paid).  If it is relatively small, it follows that there will be little to go around and a court may be reluctant to interfere with the Deceased’s Will by diverting funds away from the widow and towards an ex-wife.  The children’s financial position would, however, still deserve serious consideration even in a small estate.
  • Whether a claim will be successful does not just depend upon the value of the estate.  The court will have to look at the circumstances of C, her children, as well as the widow, and any other beneficiaries under a Will who may lose out if C makes a claim.
  • C is not sure if her ex had a Will.  The quickest way to find out (but I’m not saying it’s the easiest) is for someone to ask the widow.  I have no idea if the relationship between C and the widow is a good one.  Let me guess, from what C tells me, that the relationship is poor or non-existent.  But the widow could be asked, perhaps sensitively by a third party if necessary, about the Will.  But, otherwise, I’m going to presume that C will get little or no information or response from the widow and therefore has to consider how best to protect herself and her children.
  • C tells me that in the “divorce/maintenance papers” it states that provision had to be made in the deceased’s Will to support his children in the event of his death.  I haven’t seen the agreement (or the court order if this is what it is).  It is possible to give an undertaking (a form of solemn legal promise) to make provision in a Will for somebody else on certain terms.  Such provision may even be irrevocable – that is, once you have made the change to your Will, you can never undo it.  If you tried to undo it or, after your death, your estate tried to retreat from your undertaking, the person or persons with the benefit of the undertaking can apply to the court to enforce that benefit.
  • I don’t know if the provision agreed to be made by the deceased in his Will was for a specified amount for the children – it it was for a specific sum and the Deceased’s last valid Will does not contain this provision then at the very least, the children should recover that sum from the estate.
  • C needs to find out if her ex has a valid Will.  The deceased re-married of course, which would have had the effect of revoking his prior Will (unless it was drafted in a certain way).  I wonder how many people know that?  So, there is the possibility that the deceased made the provision in his Will, as agreed with C, for his children, but then re-married without being aware that he had revoked his Will.  So, after the remarriage, it is to be hoped that the deceased then made a new Will and remembered to include the provision for his children.  The question is whether that provision is reasonable.  If the NET estate is worth £100,000 and he has left £100 to each child, it may be imagined that a court would not regard that as being “reasonable provision”.
  • But what if C’s ex did not make a new Will after re-marriage?  In this case there would be an intestacy.  The present rules on intestacy mean that ex-spouses do not benefit at all.  Children will only benefit if the estate is worth £250,000 or over.  If the estate is worth less than this then only the widow will benefit.  But remember that Inheritance Act claims can be brought where the operation of the intestacy rules means that reasonable provision will not be made for a claimant.  So if the deceased estate is intestate, and is worth less than £250,000 meaning the children get nothing, they can claim under the Inheritance Act.  As can C.
  • One issue that can arise is the value of the deceased’s home.  If it is jointly owned legally and beneficially with his widow then upon his death the property would be automatically transferred into her name.  If this is news to anyone then have a look at my post explaining the crucial difference between beneficial joint ownership and a tenancy in common.  If the property has automatically been transferred to the widow by the death of the deceased, then its value (which may of course be significant) will not appear in the NET estate.  It is possible in certain circumstances when applying under the Inheritance Act, to ask the court to exercise its powers under Section 9 of the Act to bring the value of the property belonging to the deceased (nominally 50%) back into his NET estate so any claimants can have their claims satisfied.

Next steps for C?

It would be prudent for C to consider the following action:

  1. Contact the widow, preferably in writing  so there is a dated record, to enquire about her ex’s Will and the provision that has  been made for the children, as previously agreed, and putting the widow on notice (respectfully and politely) about C’s possible claim as a dependant.
  2. If the children are beneficiaries under any valid Will, then the executors must let C (as the parent) know that the interest is in place and the value of any specific legacies (a fixed monetary sum or item of property).  If the interest is in the residue of the estate (what is left after all the debts are paid and the specific legacies have been met, then C will be informed in due course.  It is likely that the ex will have left the residue of the estate to his widow but, again, I simply don’t know.
  3. Straight away, C should look back at her divorce papers to see what record she has of her ex’s pensions and the addresses of the trustees or administrators.  I don’t know whether C had any pension sharing orders or not at the point of divorce.  In most pension schemes it is possible to make a nomination of a spouse or children to receive death in service benefits should you die before receiving your pension.  Although no longer a spouse, C should advise any relevant pension schemes of the existence of her minor children in case her ex made a nomination to their benefit.  Even if her ex did not make such a nomination, pension trustees can exercise their discretion in favour of spouses (probably not ex spouses but you don’t know if you don’t ask) and children.  This step needs to be taken quickly in any event.
  4. The suicide may have invalidated any insurance policies – I don’t know.  But in some cases, parents who have to pay maintenance agree to take out insurance to cover the loss of the payments in the event of their death.  This agreement would normally be detailed in a court order.  If such an agreement, and a subsequent policy, is invalidated by the suicide, then it should act to strengthen the likelihood of successful Inheritance Act claims, provided there is still a reasonable amount of value left in the estate.
  5. C can make an application for a Standing Search of the probate registry.  This will tell her when an application had been made and granted for her ex’s estate to be administered, either under a Will or under the intestacy rules.  If an application has been made, C will receive a copy of the Grant and a copy of the Will.  It is unlikely that a grant will have been applied for already but the usefulness of the standing search is that it stays in place for 6 months so if a grant is given in the next 6 months, C will find out about it.  C can renew her standing search for a further 6 months each time.  C has six months from the date of the grant of representation to make any claim against the estate.  A claim outside of this time may not be successful.  This is called a limitation period and should not be ignored.  The standing search is a nominal fee – £5.00 the last time I had to use it for a client.
  6. C should try to obtain legal advice.  This area is complicated but C may be able to get a free consultation with solicitors local to her.   C will have to make sure that they have experience of Inheritance Act claims.  If it appears that there is a potential claim on C’s  behalf and/or her children, her lawyers may be able to obtain funding from a litigation provider or may be prepared to fund the case and take their fees at the end if it is successful. As far as I am aware, there is no longer any legal aid funding for such cases so it is necessary to think through what other funding options may be available.  Although legal aid is  still available for mediation, I have not heard of many mediators dealing with Inheritance Act claims.  Even the mediators who are also family lawyers, probably have little experience of Inheritance Act disputes.

I hope this post provides C with some assistance.

 

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Is collaborative law suitable for everyone?

November 26, 2013 in Alternatives to Court, Legal services, Social policy by Alan Larkin | No comments

In keeping with the spirit of Family Dispute Resolution Week  I am pleased to be able to offer another video snippet of my chat with Stephen Sulemeyer, an expert in collaborative law practice in California.

It is ironic to hear this week that most members of the public who have a family law dispute would rather go to court than use an alternative dispute resolution option such as mediation.  I think this is a great pity and I have previously discussed the failings of policy planning from the Ministry of Justice in this regard here.

For now, please have a look at Stephen answering another common question from the public about collaborative law: is it suitable for everyone?  I think his answer is honest and encouraging.  Collaborative law, like mediation and family arbitration, cannot be a panacea, but to grizzled family law litigators like me, the willingness of a client to at least consider these alternatives to court, is a no-brainer.

 

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What is Collaborative Law all about?

November 25, 2013 in Alternatives to Court, Legal services, Social policy by Alan Larkin | No comments

I was very fortunate, recently, to attend a training session with other practitioners of collaborative law, hosted by Stephen H. Sulmeyer, J.D, Ph.D.  Stephen is a charming man normally to be found in his native Californian habitat.  The members of my collaborative law group, Brightpod, managed to entice him down to Brighton whilst he was on his travels in England.

Stephen is a collaboratively trained lawyer, mediator and psychologist.  Added to which, his fondness for quoting Keats during the training makes him a top bloke in my estimation.

Stephen offered some fascinating insights into collaborative law and laid down some challenges to the lawyers in my group (I put my hand up here) to get out of their comfort zone if they wanted to offer really effective solutions for families in conflict.

Stephen was good enough to allow us to film part of the training day and I’m pleased  to offer some of the video snippets below.  The only downside is that Stephen had to contend with an interviewer (err… that would be me) who was so enchanted by the answers that he kept forgetting the questions.

What is collaborative law all about?

Please have a look at the video below where Stephen provides an introduction to collaborative law.

 

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Dispute Resolution Week

November 25, 2013 in Alternatives to Court, Legal services, Social policy by Alan Larkin | No comments

I put up a post recently about Dispute Resolution Week: please read it here.   This takes place, as I type, in various forms and guises across the country all this week.  The aim: to promote alternatives to the adversarial court process for people with family law disputes.

Resolution is the organisation behind the initiative, driven in many different ways by the members of Resolution: lawyers, mediators, collaborative practitioners and other professionals who are committed to keeping families out of court.

I’ve posted a video from Resolution below telling you all about the Dispute Resolution Week initiative.

I’ve got my hands on some great video content dealing with collaborative law  courtesy of my local collaborative group called Brightpod and I’ll post that just as soon as I can.

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Family Dispute Resolution Week

November 12, 2013 in Alternatives to Court, Legal services, Social policy by Alan Larkin | No comments

Family dispute resolution week divorce finance toolkit

BECAUSE ONE SIZE DOESN’T FIT ALL

I want to say a few words about Family Dispute Resolution Week.  I was in Nottingham a few weeks ago to attend Resolution’s Dispute Resolution Conference.  It’s the third annual conference in a row and I keep going back because I meet lawyers, mediators and collaborative practitioners who are utterly committed to pushing the boundaries of their own practices to provide better outcomes for families.  This usually means keeping families out of the court process. So I learn a lot and I come away feeling inspired.  Which is just as well when having to deal with the obstacles that get in the way of real change.  Let me refer to the usual suspects.

The usual suspects

It is not easy to push boundaries in any professional practice.  Here are a few of the obstacles in the way of pushing family dispute resolution:

  • Public ignorance.  People simply don’t know enough about the dispute resolution options that are available.  Resolution has been pushing the options for many years and any reader who is unaware of the rich resources on the Resolution website needs to hop over there pretty quickly and bookmark it for future, constant reference.
  • Professional indifference. In a sense, lawyers are the gatekeepers to the dispute resolution options as far as the public are concerned.  This is one of the reasons that the loss of 1,000 high street legal firms in the last 12 months caused the take-up of mediation to be sliced in half.  But I still think the lawyers who are left could do a better job of ‘selling’ the merits of mediation, collaborative law or (the new kid on the block) arbitration. Perhaps some lawyers are worried about turning away business if they cannot offer mediation or the collaborative discipline.  Well, call me old-fashioned but lawyers should put the interests of their clients first.  So, if a family breakdown is crying out for dispute resolution instead of the family court trial by combat then the lawyers need to pack their clients off to a mediator or a collaborative practitioner.  Better still, they should get trained up themselves to be able to offer this resource to their clients.
  • Political ideology.  The UK government ‘discovered’ mediation relatively recently, in the same way that European settlers, wading out of the  American surf 450 years ago, ‘discovered’ the New World.  It had always been there.  But this new-found zeal for mediation unfortunately coincided with the financial meltdown: the perfect backdrop against which to attack legal aid, a pillar of the post-war welfare settlement between state and citizens.  Even better, this astonishing piece of vandalism against the body politic would serve to stick it hard and fast to two despised constituencies: the ‘undeserving’ poor and the fat cat lawyers.  In short: get rid of as much family legal aid as possible and force the low income  punters to run from the lawyers and into the welcoming arms of the army of mediators ready to take their place.  Yeah, that worked really well.  Hands up, Mr Grayling, didn’t you foresee that all the punters would run off to the courts as litigants in person putting a strain upon the court services whose budgets had already been slashed?

Better news: Family Dispute Resolution Week

Well, I like mediation anyway: always happy to get my clients off to see a mediator.  But mediation is not the only gig in town. You should check out collaborative law and family arbitration on the Resolution website.  How can you find out more?  Resolution, the national organisation of family lawyers is promoting the second …

Family Dispute Resolution Week

from the 25th to the 29th November 2013

 

Did you get that?   This means Resolution members throughout the country will be hosting events and trying to gain publicity for the alternatives to the court process.  In the main this means promoting the benefits of Mediation, the collaborative law process and Arbitration.  You may hear features on the radio, see articles in the local press or even bump into smiling faces at your local court handing out flyers and lending a sympathetic ear.

My bag is collaborative law where the parties sign an agreement not to go to court and the lawyers work with each other (instead of against each other) in the interest of the whole family.  Collaborative lawyers form local groups to share experience and improve practice.  I belong to two pods in the Brighton area: Sussex Family Solutions and Brightpod.  We will be promoting the benefits of family dispute resolution to the wider public.  Twitter users should be able to search for local developments using #keepitoutofcourt closer to the time.  And why not follow @ResFamilyLaw why you’re at it

Divorce Finance Toolkit

Mr Grayling – our man at the Ministry

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Legal aid in family law

November 11, 2013 in Legal services, Social policy by Alan Larkin | No comments

 

you can still get legal aid for mediation

You can still get legal aid for mediation

 

I reminded my readers not so long back that you can still get legal aid for mediation in family law cases.  Legal aid in family law has been cut to the bone.

The government took a big axe to civil legal aid in April this year so you might think they would at least provide some publicity for those areas of legal aid still left, battered and bruised though they may be.  Well, I’m sure the Ministry of Justice is doing a grand job.  So grand it has completely passed me by (and I am the sort of person looking out for these crumbs of comfort from the caring sharing coalition government).

Fortunate then that I came across the truly grand poster prepared by the Legal Aid Practitioners Group (LAPG).  My interest is in legal aid in family law and the poster covers that. But fair do’s to the CPAG for listing every last circumstance in which civil legal aid might still be available.  Good on yer.

 

Click on the link below to see the poster.

 

LAPG Legal Aid poster

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Online divorce for fixed fee

October 8, 2013 in Alternatives to Court, Legal services, Self-Representation, Technology by Alan Larkin | No comments

Online Divorce

 

Regular readers of my blog will be used to me referring to my ‘day job’: as a family solicitor and collaborative lawyer at Brighton based Family Law Partners.  I am fortunate to work with a really strong team which is highly rated in the independent legal directories such as Chambers & Partners and also the Legal 500.  We specialise in offering our clients bespoke services such as mediation and collaborative law which usually involves face-to-face contact.

However, in a small but signifiant shift, we decided some time ago that we would open up access to our online divorce document platform.  My blog subscribers will know that that has been an aim of mine for some time. Our online document platform allows our clients to create their own divorce or civil partnership dissolution documents any time of the day or night.  Then they just let us know when we can review and approve the documents for them.   Previously, we kept such innovations strictly available only to our full-service clients who in the main are drawn from around the South East.

Why online divorce services?

I have tended to think of online divorce services as absolutely fine if the primary need is the processing of the divorce papers in a very straightforward case.  I regarded online divorce services as suitable for uncontested divorces.  As any decent divorce lawyer will know, there are some important strategic considerations to be kept in mind when completing divorce documents.  It is not as straightforward as might be thought.  The contents of a divorce petition can have an impact upon related proceedings dealing with the children or with the finances.

One of the drawbacks with purely online divorce packages appeared to me to be the need for the big players to deal with as many cases as they can.  They need high volume and low operating costs. But it does mean that if you look at the small print in certain of these online divorce websites  it will say that if you want legal advice you must go and speak to a lawyer.  In other words, the people who process the divorce forms are not legally qualified.  If you google ‘online divorce’ you will see the same handful of providers jostling for space at the top of the first page.  Google must make a fortune out of those sponsored links!

My firm is extremely busy.  We are fortunate in that. Did you know that 1,000 high street legal firms have closed down in the last year?  It is quite astonishing.  The disappearance of high street legal firms means that some people will have to rely upon getting online assistance with their divorces and utilise fixed fees.  But they should still get legal advice.  By that, I mean, proper, fully qualified legal advice.  When I look up from my PC at work in our open plan office, I can see a highly experienced legal team – between us we have over 80 years of legal experience, of every sort of case, involving clients from every walk of life.  That experience is hard won. But we regard it as an investment for our future clients.

We know that legal aid has disappeared for most family law cases (but not mediation – remember that please). So although we are busy, we have decided to offer our online divorce platform to the wider public.  This service will not be advertised on my firm’s website – it will only be offered to a small section of the public – mainly to the readers of the Divorce Finance Toolkit blog.  By keeping the take up of this service relatively modest, we can continue to offer proper legal review, from highly experienced lawyers,  to our online divorce clients at a fixed price.

Best of all, I am grateful to my team for letting me offer an exclusive 15% discount for this service to the readers of my blog.  Aside from divorce documents and civil partnership dissolution documents, we also have a pre-nuptial agreement package and a separation deed package.  Click on the banner at the top of the page.  If you decide to use the services please enter the following discount code to save yourself some money:

DFTFLPdisc1

The access to our online divorce services will be kept open for the foreseeable future but we will probably pull it if we get too busy as we would rather keep the quality of the service high by keeping the volume of users low.

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