Divorce & Family

Collaborative Law: A new approach to divorces

Divorces can have a devastating personal and financial effect for many families. However the impact of divorce is particularly keenly felt on family businesses which may have to be sold or heavily financed to the point where the remaining operation is crippled as a result.  The problem is often compounded by spouses being equal partners/shareholders in the business and/or being in business with other family members and adult children.  In the worst divorces these businesses can become deadlocked which can effect livelihoods, sometimes of a number of generations.

Collaborative law is a different way of dealing with divorces which allows the business to continue to operate whilst looking at creative solutions which can involve the trusted accountant without them being caught in the cross fire.  It may also allow the accountant to keep working with both spouses (and their wider families) once a divorce settlement is achieved.

The Courts are a blunt and inflexible tool for resolving problems that beset a divorcing couple who are in business together.  The Court process involves a set timetable and values are taken at a snapshot in time which do not always reflect the true value or concerns of a business.

In the Collaborative law process, the parties and their lawyers sign an agreement which states that they won’t go to Court to resolve the issues between them.  If either client wishes to go to Court then both lawyers have to stop acting and new legal advisers have to be instructed with all that entails in terms of wasted time and cost.  This encourages everyone to stay at the table and keep talking knowing that if a solution cannot be achieved then everyone will have to start again.

Another feature of Collaborative law is that the parties set their own agenda and timetable.  Neither the court nor the lawyers dictate what issues are to be addressed or how quickly everything has to be done.  As a result the issues that the couple wish to be dealt with are addressed and this can be done more quickly or slowly than the usual court timetable which can take a year or more if everything is contested.

This flexibility allows the parties to focus on what they wish to achieve and to look at joint goals such as maintaining a business for their children which sometimes in the traditional process can be relegated and overlooked in the heat of a court battle.  In collaborative law, the parties are encouraged (and the lawyers trained) to look for areas of common ground as these are the building blocks to a settlement.  In traditional litigation, lawyers are trained to differentiate and to highlight things that one spouse has done better or contributed more to than the other, this is less likely to lead to settlements which are acceptable to both parties or which deal with wider concerns such as preserving a family business as each lawyer is focused on the needs / rights of their own client over and above the other party and the wider family.

In collaborative law, the lawyers are working as a team to try to find solutions which meets the needs and aspirations of both spouses.  Also, existing accountants and advisors can be brought into the process to assist both parties rather than new experts being introduced who do not have the benefit of knowledge built up from acting for the family.

Many specialist family lawyers are trained in Collaborative Law but its profile still needs to be raised.  A promotional week has now been organised to achieve this and make as many people as possible aware of the benefits of this process.

For further information on any of the issues in this article, please contact Daniel Eames.