Post Gavel

Family lawyer Melbourne

Settling out of court after separation – what are your options?

Once a train speeds up momentum is run-away- it is very difficult to stop. It’s the same with court cases.  In the case of litigation, especially family law matters it really is a case of “it takes two to tango” if you want to settle out of court after you have already started the battle.

If legal fees are mounting up and there no longer appears to be a clear case for victory, you will certainly have incentive to settle out of court.

On the other hand if the other party wants vengeance and has plenty of money to burn to “drag” you through the court system there may be little you can do but to continue the fight or worse still just lie down and agree to take the other party’s extortion demands.

However all is not lost.  There are various ways to make an offer of settlement highly attractive to motivate the opposing party to give up the fight.

Threaten a costs order against the other side

One way is to hedge your bets is with an Offer of Compromise/Formal Calderbank Offer of Settlement.  This puts the other party on notice that if they don’t do better at the final hearing when the Judge hands down decision, then they will be likely to pay your legal costs from the date of the Calderbank offer you made.

Costs orders are not automatic in all jurisdictions.  In the Australian Family Law Courts it’s a matter of the Judge deciding what is fair taking into account the following factors:

                     (a) the financial circumstances of each of the parties to the proceedings;

                     (b)  whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;

                     (c)  the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;

                     (d)  whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;

                     (e)  whether any party to the proceedings has been wholly unsuccessful in the proceedings;

                      (f)  whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and

                     (g)  such other matters as the court considers relevant.

It can be difficult to get a costs order in family law children’s matters.  However in family law financial matters it is likely that a costs order will be made against the unreasonable party -if they did not take up a reasonable offer to settle financial issues.  For how this works watch this short video:

Offer to pay for the costs to draw up the legal settlement

Sometimes the parties are so close to settle a matter but neither wants to pay for the legal costs of drawing up the legal document to make the proposed agreement binding.

You have to ask yourself the question- how much is it to your advantage to have an agreement made legally binding once and for all?

Like insurance, a binding financial agreement in a family law matter (provided it meets all criteria) will insure you against future claims.  This is extremely  important if you are the one receiving real property which may double in value in future.  It is also important to make sure that your deceased estate benefits from your property after death, and not an ex partner who you did not legally finalise property matters with.

The good news is – unlike insurance premiums you have to pay every year, legal fees to draw up such a document are paid only once.

Get a divorce to make the clock start ticking with time limits

If property matters cannot be resolved and you already have the assets you want in your name, another technique to either call the other party’s bluff or put an end to their time limits in applying for property settlement, is to divorce them.  Although there are exceptions to this general rule it works like this:

  • To use the courts to finalise property settlement or spousal maintenance after a marriage has ended you must apply within 12 months after you have officially divorced (note however that you cannot apply for divorce until you have separated-whether it is under one roof or not- for a minimum of a year).
  • To use the courts to finalise property settlement after a de facto / domestic relationship has ended your must apply: 2 years from the date of separation ( regarding: Victorian relationship/ assets)

So effectively you could cut the other party off from taking you to court for financial claims in a family law matter- by simply getting the divorce out of the way and wait and see what happens 12 months after the divorce was granted.  (for de factos unfortunately it is a 2 year open window).

A divorce application is normally straight forward and you don’t even have to attend court if you have a lawyer attend on your behalf.

Get a second legal opinion before the costs get out of control!

There are obviously many other techniques to motivate the other party to settle out of court- before court proceedings are started,  during court proceedings or even on the day of the final hearing.

Getting a second opinion is worthwhile- to see if you can save money and secure a better settlement.  Remember, the earlier you do this the better chance  you have of putting a good strategy into place.

Always ask a specialist!

As you can see this is not a simple area of law and great care should be taken when there is any dispute about family law issues and financial disputes generally.

It is simply not worth the risk to make a serious mistake that will cost tens of thousands of dollars in having to go to court over these types of disputes.