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Home / News and Insights / Insights / Joining third parties to financial proceedings on divorce

In most cases where financial applications are made on a divorce or civil partnership dissolution, the parties in the court proceedings will be just the two spouses or civil partners. As part of the financial remedy process, the Court will then be asked to determine what would be a fair financial outcome for those two spouses / civil partners, taking into account all the circumstances of the marriage / civil partnership, any children, and the parties’ respective financial positions.

However, there will be other cases where it is appropriate to join a third party or have them intervene in the court proceedings. By joining a third party to the financial remedy proceedings alongside the spouses / civil partners, that third party will be bound by the Family Court’s decision. This could be helpful in cases where there is a risk of future litigation on the same issues. For example, if the family home is owned legally by a third party and the Family Court makes an order that the property is to be sold or transferred to one of the spouses, the order for sale could not be enforced against that third party if they were not joined to the family proceedings, and further litigation may be necessary in the Civil Court.

Simply put, a judge can agree to add a third party to proceedings for financial remedy if it would help the court resolve all matters in dispute in the existing proceedings and / or if there are issues relating to financial disclosure or enforcement. A third party can be added by the court itself (on the judge’s own initiative) or upon a successful application being made by one of the spouses or that third party themselves.

Types of cases:

Each case will be determined based on their own set of facts. However, types of cases can include:

  • If one spouse asserts that a third party has an interest in property or assets disclosed within the proceedings, For example, if one of the parties’ parents put up the money for the deposit on the family home, there is a dispute as to whether the parents retained a beneficial interest in that property.
  • If one spouse asserts that the other spouse has an interest in assets in the name of a third party. For example, if one spouse transferred assets to a third party but the other spouse asserts that the third party is just holding the assets and the true owner is still the first spouse.
  • Where there are trust assets and it is appropriate to join the trustee (or even other beneficiaries) to the proceedings. Trustees could be joined to family proceedings if, for example, there will be issues enforcing an order involving trust assets, if there are any allegations as to the way the trust is founded or if it is asserted that the trust is a sham, or if there is an application to vary a nuptial settlement.

When is it advisable to join a third party to the proceedings?

Joining a third party to the proceedings can result in increased costs for all parties, so careful consideration will need to be given as to whether such steps are necessary and proportionate. This will depend on the circumstances of each case, including the value of the assets in dispute, whether there will be any issues relating to enforcement of the order, the anticipated costs of joining a third party (who should obtain their own independent legal representation), and whether there are other ways to deal with the particular dispute (such as possible add-back or set aside applications) or to achieve fairness between the parties.

When trusts and nuptial settlements are involved, the Family Court will usually try not to interfere with a nuptial settlement any more than is necessary, particularly in cases where third party interests would be affected. However, the Court can and will make orders regarding a nuptial settlement if needed, so in these circumstances, trustees may wish to be joined to the proceedings to put their position forward.

Careful consideration will also need to be given as to whether or not a third party should intervene or be joined to Family proceedings, not least because costs orders could be made against a particular party if such issues are not dealt with early enough during the proceedings and / or where an ill founded application is made.

Specialist legal advice from a member of BDB Pitmans’ family team should be sought if these matters are or may become relevant.

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