Valentine’s Day - a day for chocolates, flowers, romantic movies and ice cream – but when did this tradition begin? Who sent and received the first doting love letter? Our ancestors certainly didn’t know the cold comforts of Ben and Jerry’s!
One legend depicts Valentine as a priest serving in Rome during the third century. Some stories suggest Valentine was killed for helping Christians escape strict Roman prisons. Whatever the truth behind the history, it’s believed that Valentine’s Day is celebrated in the middle of February to honour the anniversary of Valentine’s death.
Therefore, it seems a little ironic that ‘Divorce Day’ falls a mere six weeks before this time of love and romance. ‘Divorce Day’, a term used in the legal sector, is the first working Monday after the Christmas holiday period which sees a surge in couples filing for divorce. According to experts, the main cause of this is a build-up of festive stress, family tensions and financial demands.
COVID-19 has only exacerbated this trend, as marriages have been locked down at home, forcing families to spend more time together than ever before. With the added pressure of factors such as employment instability and health concerns, including the increase in mental health problems related to Coronavirus, it’s no surprise that a recent study showed a 122% increase in divorce enquiries between July and October 2020 in comparison to the previous year. The pandemic appears to have been a catalyst for already unsettled relationships and has dismantled comfortable and established routines, which may have concealed such issues.
Divorce is a stressful time for couples, particularly during the current Coronavirus pandemic. One approach that may help is the collaborative process; a legal practice that involves both partners and their respective solicitors meeting to discuss and resolve issues without needing to go to Court (other than to authorise the terms of agreement decided through the process). Both lawyers must be trained in the collaborative process and act in the best interests of the couple and their family. In order to achieve the best agreement, the lawyers work together rather than against each other. The collaborative process can have several advantages: it can be more cost efficient and private than litigation; parties can have greater control of the resolutions rather than the Court enforcing them; and it can be a less stressful approach, particularly when children are involved.
Division of assets can be problematic in a divorce, particularly if the separation involves the valuation of financial assets such as a family business. This is where lawyers often enlist the help of a forensic accountant to ensure financial clarity between parties. As part of this, it is important the accountant assists those instructing in an effective manner.
I would make the following observations:
It’s important to understand that each case is extremely personal to both of the parties involved, both emotionally and financially;
Parties in divorce matters pay the fees personally and are unable to reclaim the VAT element and hence a valuation can seem like an expensive exercise; and
Effective and proportional work planning, cost management and transparency with both solicitor and client is key.
In my experience, as someone regularly instructed in these matters, there are two key ways of helping the parties:
By offering clients a range of valuation report options, some more formal than others, this means the right amount of work is undertaken at the right stage of proceedings; and
Clear and accurate cost forecasting, and offering fixed fees wherever possible, helps to provide clients with visibility, certainty and control over the process.
In most cases, and certainly, those being resolved collaboratively, huge and expensive reports with numerous complicated appendices are not always what’s best to help parties resolve their financial differences. Whilst forensic accountants play an important part in the dispute resolution process, perhaps they also need to get more into the collaborative mindset.
