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  • The Impact of No-Fault Divorce and Financial Settlements

    The Impact of No-Fault Divorce and Financial Settlements

    On 6 April 2022, the new no-fault divorce law was introduced in England and Wales. As well as transforming divorce law, the changes are also expected to have a positive effect on resolving and settling the matrimonial finances.

    Under the previous divorce law, the petitioning party was required to blame the other for the divorce if they had not been separated for a period of two years or more. In many cases, this led to unnecessary animosity and increased tensions. The move to a no-fault divorce removes the need for blame and can assist the parties to end the relationship in a more amicable way.

    What impact will no-fault divorce have on resolving a financial settlement?

    When a marriage or civil partnership comes to an end, it is crucial that the parties consider resolving the matrimonial finances by reaching a final settlement on how their assets should be divided. Reaching a financial settlement is vital to ensure that both parties have financial security not just at the time of the divorce, but also in the future. Once a financial settlement has been reached, the terms are then incorporated into a legally binding financial agreement called a Consent Order.

    Previously, before the introduction of the no-fault divorce, divorcing parties would commonly rely upon the other parties “unreasonable behaviour”. This required one party to provide examples of the other party’s unreasonable behaviour in order for a divorce to be able to proceed. For many Respondents to a divorce, the reasons stated in the divorce petition were extremely unpleasant to read. There was also a large misconception that the allegations stated would have a negative impact on the financial outcome of the divorce. However, in reality, it is only in extreme circumstances that a court would consider a party’s behaviour when determining a financial settlement.

    The court further places emphasis and encourages parties to attempt to reach a financial settlement between themselves by consent, without the involvement of the court. Given the emphasis on parties reaching a financial settlement amicably, the previous divorce law was somewhat at odds with the wish for parties to work together in resolving the finances. Additionally, if one party took offence to the allegations named in the divorce petition, they may have been less inclined to wish to take a reasonable approach when negotiating the matrimonial finances.

    Many legal practitioners are hopeful that without the need for blame, it is likely that the new no-fault divorce law will have a positive impact on the financial aspects of a divorce by allowing parties to work together in a more amicable way. The new divorce law reform is therefore welcomed for the positive impact it will have on separating parties, allowing them to be able to act in the best interests of one another in resolving any outstanding financial issues.


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