“Success occurs when opportunity meets preparation”
Before you and your former partner are likely to feel ready, willing and able to explore your financial options in mediation you will need to feel satisfied that you have the full financial picture or, as it is sometimes referred to, a ‘full and frank’ financial disclosure.
The objective of a full and frank disclosure is different in every circumstance and is something we cover in much more detail in the chapter- Full and Frank disclosure Q&As
In this section we want to explain 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 mediators and solicitors, in the field of complex financial circumstances, many of our mediators have sadly experienced far too many mediations failing before they ever get off the ground because of mistrust and suspicion, often fuelled by a belief and suspicion that the other person is or will be reluctant to disclose their information or is hiding something.
From our experience, an apparent reluctance to disclose information can often be driven by a number of factors which have nothing to do with an ‘intent to hide or mislead’, such as;
- feeling forced down a route you do not want to go, especially if you do not want a divorce. No one likes feeling compelled or coerced.
- Believing and feeling that the person asking for the information is not genuinely interested but is simply fishing for information or wanting to punish you.
- perceiving that the information is being demanded rather than ‘requested’. Let’s face it who likes to feel that they are being told what to do especially when there may be a sensitivity to this!
- Being asked for information and documentation you might consider to be irrelevant or disproportionate
We cover this barrier in some detail in the chapter- preparing to communicate in mediation and the section about making requests, not demands and refer to the point about relevance and proportionality in other chapters.
Whatever the reasons for the reluctance, rather than seeking to impose one’s will, legal right and ‘sense of entitlement’, making this a battle of wills, surely the kind of problem-solving questions that need to be asked go something like 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? If you are being asked for information, try and consider the questions from the ‘Askers’ point of view, especially if they do not have the financial knowledge and confidence of the person being asked for info and have not be in control of the family finances
What is the person needing before they feel willing and able to provide the information and documentation being requested and answer the questions being asked?
What might they be afraid of or objecting to and why? What is driving their resistance. It might not be what you think it is. In fact, quite often it is not?
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 with an explanation as to why it is needed (validation) you significantly increase the chances of your request being met.
One simple answer, especially if the financial circumstances are more complicated involving a number of financial experts, is for each person in mediation to be willing and open to working with their solicitors (and financial experts) and co-operating with each other’s solicitor to ensure that the financial disclosure process is robust, giving confidence to everyone involved that things are not been hidden before coming into mediation to explore your financial options for settlement.
Another great strategy to think about is the use of a Financial Neutral to help you both with the task of collecting and providing the right information.
You also might want to consider whether a Form E exchange process is the right process for you both in your circumstances. There are other options.
Returning to the reluctant to disclose point, let’s face it, it would be very foolish indeed to hide anything bearing in mind that:
- this would have the effect of undermining the mediation process and continue to fuel suspicions unnecessarily and
- 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 punish with ‘cost orders’, and
- if an agreement is reached and a court order made based on an incomplete financial picture there is a good chance that the order will simply be overturned (appealed), and,
- The whole process could take a great deal long, cost a great deal more and lead to a great deal more stress.
So, what on earth would be the point!
Having agreed the importance of making a full and frank disclosure, how can the mediator, solicitors (Financial Experts) and clients, work together in and around a ‘supported mediation’ process, ensuring that a full and frank financial disclosure is made, so that an accurate up-to-date financial summary can be created in mediation by the mediator, as quickly and cost effectively, as possible for everyone.
Here is our suggestion, in 4 stages:
Stage 1–
To start with, each person simply does their best to complete their financial disclosure booklets and obtain the correct supporting evidence, using this book, the guides and online videos, with the minimum of solicitor support, at this stage, unless the circumstances are particularly complicated, in which case ask your mediator who they can recommend to help you with this task.
Have a look at an example of the financial booklet we refer to which you can find as part of the chapter- financial agreements in mediation- 5 stages
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 the facts and figures may be very simple.
Also, do not forget that a financial adviser/Neutral can also be very helpful (as part of your financial team) when it comes to gathering details about shares and investments and helping you to prepare monthly expenditure budgets and projections, for example (Mediation Team).
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, building trust confidence in each other and the figures, all of which is managed carefully by the mediator.
In mediation, when a client says:
‘ I am not happy that X has failed to disclosed A or B’
the mediator might invite a discussion around the questions,
‘What specific information are you asking for’
‘How will this information and/or document help you to explore and reality test the kind of options and solutions we have discussed’ and
‘What would satisfy you or what do you need to see/have to be satisfied that you have the information you need’
and then go on to prepare an agreed list of information and evidence for each person to produce for each other before the next session with an agreed timeframe. This list can also be shared with your solicitor who may wish to add their own questions and request for documentation (see below).
There seems little point getting to the end of the mediation process, having reached an agreement/proposals only to discover that you or your solicitor require more information.
How frustrating would that be, to say nothing of the extra legal costs you would incur?
Again, it may help you to have a look at the Open financial summary and example mediation outcome summary which you will find as part of the chapter and video series- financial agreements in mediation- 5 stages.
Stage 3–
It is important for each person and their solicitor, if they have one, to be given time to consider the draft open financial summary and ask for additional information and evidence from each other if needed (and properly validated), agreeing a timeframe within which 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 the chapter on pensions in divorce and business interests and divorce for the alternatives about how to obtain these reports).
We would like to add a note of caution here.
If you and your solicitors get into difficulties during this stage, sending letters backwards and forwards, please, please come back into mediation, as soon as possible, where the mediator can do their job, the job which they are skilled at, the job of containing, managing and diffusing any conflict and refocusing everyone on finding solutions to any impasse.
We emphasise this because we see far too many mediations falling apart, at this stage, simply 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 or not getting what they want when they ask for it.
Again, please think about how you ask for information and documents, taking care to 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.
If your solicitors are playing a more active role with the financial disclosure process, they may have updated the financial summary for you before you return to mediation but they are likely to charge you for this time if you need them to do this for you.
Alternatively, you might feel confident and comfortable to update the financial summary spreadsheet yourselves. If you do please make sure that you both agreed the updates and ensure that the mediator receives the most up-to-date version before the mediation session begins.
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.
It is important that each person feels that they are making enough progress in mediation if this process is to work.
The main objective of this 4th stage of the mediation disclosure process should be to 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 mediator moves onto the next stage, which we cover in the next section- 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.
Let us now move on to look at your solicitor’s role in the fourth section and video in this series- preparing you to explore financial options.