You will often hear lawyers and judges commenting on how difficult it is to resolve financial remedy applications where there isn’t a lot of money. Trying to make two homes out of one is sometimes impossible. There are some important things to consider when you are looking at cases with limited assets and some pitfalls to avoid. This is a whistle-stop tour of some of those legal and practical issues.

Shared ownership schemes

These can sometimes seem like the answer to the problem when rehousing is necessary but do your research, look into all the charges on these schemes. How easy will the property be to sell on in the future? What are the service charges? How much of the property will you own? What is the rental element? Is it actually going to be the right option?

Impact on benefits

Is spousal maintenance going to reduce your universal credit? Will any lump sum mean that you lose means tested benefits? How are you going to factor that in? The Money and Pensions Service has a website ‘Money Helper’ which provides some tools and calculators which, although they do not replace independent financial advice, might be a helpful starting point for some clients: https://t.ly/NbK9m.

Family support

Sometimes there will be cases where family members are able to provide some financial assistance to separating parties to enable them to move on. If this is the case think about what the end result of that means. For example, does this give the family member an interest in the family home? How are any loans going to be repaid? Ensure clear records are kept by everyone and appropriate legal advice sought. The court cannot force a family member to assist, but if there is that resource available the court and the other party will need to know what it is and the terms of the assistance.

Liabilities

How are the debts of the family, including through litigation, impacting upon mortgage raising capacity, mortgage repayments, ability to obtain further funding? Does your client have a financial advisor who can consider options for managing these debts? In cases where there are significant debts already it can really hamper the ability to move forward. Recognising this at an early opportunity can help with mitigating further debts through the costs of proceedings, if at all possible.

Budgets

It is so important if you are making a maintenance claim where money is tight to have a realistic budget. Sometimes schedules of expenditure can be completely contrary to the evidence before the court and it is not helpful. (And likely to be a waste of legal fees drafting and/or considering them!) I have always found having sensible and realistic schedules in modest asset cases is far more persuasive to the court. Equally, in these times it is expensive to heat your home, pay for your electric and finance the food shop so where those costs have increased do not be afraid to say so. Schedules should be updated, especially if there has been a delay since the form E was filed. It can be very helpful for a judge to have an updated schedule (if required) during proceedings when disclosure is updated.

Recent cases

Helpfully there have been some recent decisions in cases with a limited asset pot which have been reported. One such case was helpfully highlighted by James Roberts KC on X recently (which can be an excellent way to keep up to date with reported cases making the ‘legal twitter’ headlines – especially through the FRJ!), https://t.ly/fbx2U, the Northern Irish case of G v G [2024] NIMaster 5 heard by Master Bell. This is a case where there was very little to go around and the court considered the issue of need, awarding 100% of the equity in the home to the applicant wife along with a pension sharing order in the full amount sought by the wife of 38.6%. Master Bell also made a costs order against the respondent husband as to £10,000 towards the applicant’s costs, referencing OG v AG. It also provides helpful guidance on the issue of coercive control in financial remedy proceedings.

JN v GN [2023] EWFC 244 reported in November last year (and helpfully summarised by Charlotte Lanning for the FRJ website here: https://t.ly/lXSg7 is a decision by District Judge Hatvany in respect of a needs case where the assets were limited. The husband had wasted a considerable inheritance that he had received post separation which would have enabled him to rehouse. He also spent the endowment policy and cashed in his pension. Wife sought the home to be transferred to her and husband to clear the outstanding mortgage. The house was transferred to her but the mortgage was not to be repaid by husband as there were not the funds to do so. The husband had to pay towards wife’s costs in the sum of £10,000, payable by instalments.

In my experience the court often wants you to ‘think creatively’ in order to settle a case of this nature. This is where alternative dispute resolution (wherever possible) is so important. The court is often described as a ‘blunt instrument’ and it has a wide discretion. The best way of getting a creative outcome which everyone can ‘live with’ is by settling matters outside of court if you can. If not, narrowing the issues is key as well as keeping an eye on the costs v the net assets in the case. As seen from the two cases above, it doesn’t matter if there is not a lot of money in the pot – the court can and will order costs if a party’s litigation conduct dictates it.