The latest lockdown, spanning four weeks from Thursday 5 November, will see courts continue to operate, however, there has never been a stronger case for couples to agree their settlements out of the courtroom.
The COVID-19 pandemic is accelerating societal trends, from the way we work to how we buy goods and services. Many of these changes involve moves towards digitisation and the legal system is no exception. In recent years, when it comes to divorce and financial remedy proceedings, courts struggling with ever-increasing workloads have encouraged parties to consider alternatives to litigation. The Corona virus restrictions, resulting in even longer delays for hearings, adds further impetus towards this for practitioners and their clients.
Alternative Dispute Resolution
Organisations such as Resolution have long-advocated a non-confrontational approach to family proceedings, arguing that it invariably produces better outcomes for separating couples and their children. Known as Alternative Dispute Resolution (ADR), these methods include mediation, arbitration, round table meetings, collaborative law and private Financial Dispute Resolution (FDR). As well as providing savings in terms of both time and cost, these approaches can be far more flexible and tailored to meet the needs and requirements of individual cases. They also provide the parties with a means of having their voice heard and can provide a more satisfactory conclusion to the breakdown of a relationship. It should be noted, however, that not all cases are suitable for negotiation, for example when there is domestic violence or one party will not engage with the process.
A family mediator is an impartial third party who will help couples resolve the disputed issues with the aim of producing a private agreement. This ‘Memorandum of Understanding’ can then be made legally binding by instructing a solicitor to draft an order for a court to approve.
Round Table Meetings
Lawyers and their clients meet together in a spirit of open dialogue with the aim of resolving disputes and differences. Third-party experts in specific matters such as tax or family counselling can sit-in to provide additional advice.
Parties and their collaboratively-trained legal representatives meet together, having first signed-up to a ‘Participation Agreement’ that commits them to work within the principles of the collaborative process and cooperate in achieving their divorce and financial settlement. If agreement cannot be reached, the lawyers are not permitted to act in any future proceedings, ensuring they are incentivised to resolve matters.
A private dispute resolution process whereby the parties jointly appoint an arbitrator (usually specialist family solicitors, barristers or retired judges) to resolve the dispute. Arguments will be put to an arbitrator in a similar way as they would to a judge and any decisions will be binding. As in mediation, the decision will need to be made into an order for court approval.
Taking the place of court-based FDRs but with equal legal standing and higher settlement rates, an experienced family lawyer or judge, chosen by the participants, will hear the case at the time of their choosing. This provides greater control over the process for the parties involved.
In the bleak months ahead, when the nation’s physical and economic health is likely to remain under siege, it would be heartening to think that the trend towards a more conciliatory approach in divorce proceeding will continue, reducing stress and trauma for the parties involved.
I am buying a house and the estate agent is recommending that I use their ‘panel solicitors’, who are based 200 miles away; should I? What other things should I consider?
When people are choosing a legal advisor to help with buying and selling property, there are many things that they will consider, such as price, recommendations and location.
What many people do not consider is whether the person they appoint is qualified and experienced enough to carry out the work; rightly so you would think – it should be fair to assume that if you instruct a firm of Solicitors or Licenced Conveyancers then the person you speak to is qualified.
However, unfortunately it is often the case that many larger firms (particular estate agency panel firms) employ teams of unqualified individuals to undertake the conveyancing on a tick-box exercise basis, with just one qualified person supposedly overseeing and supervising everything. This sometimes only comes to the attention of the buyer or seller once the transaction has commenced, at which point most people think it is too late to switch.
What difference does it make?
The result is that the smallest of problems on a matter, which might otherwise be easily dealt with by qualified conveyancers, cause unnecessary delays and stress for everybody else in the ‘chain’.
If you choose a Solicitor, Legal Executive or Licensed Conveyancer to act for you, you know that they have had to go through a thorough training process and are required to undergo regular training in order to keep their knowledge up-to-date. Also, if you choose local, then you will be able to actually see who is acting for you, rather than just relying on post and email (although with modern technology, distance is not a bar to good service).
Is it a genuine referral?
Your agent may also be receiving a considerable referral fee for ‘recommending’ their panel firm and so you should ask them whether this is the case; using the panel firm on the other side of the country is unlikely to save you any money (and may actually cost much more than a qualified Solicitor), but may well earn the agent some extra fees on top of their commission!
Points to check
Our recommendation is that you only instruct your conveyancer once:
a) you have spoken to the person who will actually be doing the work for you and been provided with a detailed estimate of costs;
b) they have confirmed that they will be dealing with your matter from start to finish and they have confirmed their qualifications/experience
You should also check that the firm you instruct holds the Law Society’s ‘Conveyancing Quality Scheme’ accreditation.
Whilst some transactions are easier than others, conveyancing is, despite the common misconception, not simply a tick-box exercise – property law is complicated, with lots of traps for the unwary; you should only entrust what is likely to be one of the biggest (and sometimes the most stressful) investments of your life with someone who is qualified and experienced to look after you and who will be with you every step of the way.
At Batt Broadbent, it is a matter of principle for us that you will always have direct contact with the Solicitor or Legal Executive who is responsible for your matter; we would be delighted to hear from you:
Chippenham – Sue Badminton; A Legal Executive with 20 years’ experience. 01249 472 444.
Salisbury – Andrew Hart; A Solicitor with 28 years’ experience. 01722 411 141.
Salisbury – Martin Short; A Solicitor with 32 years’ experience. 01722 411 141.
April 2017 will see the introduction of a new inheritance tax exemption which links to someone’s main residence. The ‘residence nil rate band’, as it will be known, will start at £100,000 and will increase by £25,000 for four years so that in 2020/21 estates may be able to claim an exemption of £175,000 to set against the value of a property.
This exemption will be in addition to the current nil rate band of £325,000 and, in the same way as the current nil rate band, can be transferred between spouses or civil partners. This means that by 2020/21 if a widow or widower dies having inherited everything from the first spouse to die they may be able to claim two nil rate bands and two residence nil rate bands. This means that the total exemption available will be £1 million.
The residence nil rate band can only be claimed in certain circumstances. The property will need to be left to ‘lineal descendants’ which, in this case, is defined quite broadly. The definition includes children, grandchildren or step children. It also includes sons and daughters in law and foster children.
Additionally, the residence nil rate band will be tapered if an estate is worth more than £2 million. While this sounds quite high, the value that is used to see whether the estate qualifies for the residence nil rate band is the value before any additional reliefs (such as business property relief) are applied.
Having certain types of trust within a Will may prevent the residence nil rate band being claimed. This is because the property has to be ‘closely inherited’ i.e. pass to someone directly rather than via trustees. It is worth remembering that this will only apply for certain trusts so it makes it particularly important to review the content of your Will so you know where you stand.
It is advisable to review your Will regularly or if circumstances change. The introduction of the residence nil rate band provides such an opportunity. It might be the case that no changes are necessary but it is better to by fully aware of the circumstances than to miss out on being able to claim this new exemption.
For more information contact Jo Clements or Alison Bamber in our Will, Estates and Trusts department on 01722 41 11 41 or 01249 47 24 44