We Have Separated Our Finances: Do We Need A Court Order?

What Is a Consent Order?

A consent order is a court-approved document that records the financial agreement reached between divorcing spouses and makes that agreement legally binding and enforceable. It can deal with the transfer or sale of property, the division of savings and investments, lump-sum payments, maintenance obligations, pension arrangements, and other financial matters arising from the breakdown of the marriage.

The order is made by consent because the parties have already agreed its terms and are seeking the court’s approval of that agreement, rather than a judicial determination of the issues. In most cases, the application is dealt with on paper and neither party is required to attend court. Once approved, a consent order provides certainty and hopefully helps to prevent future disputes.

Why a Private Agreement Is Not Enough

By virtue of the marriage, each spouse generally has the right to bring financial claims against the other on divorce, including claims relating to capital, pensions and income. In many cases, these issues are resolved by agreement through direct discussions, mediation or negotiations between solicitors, without the need for contested court proceedings. While this is often a sensible and cost-effective approach, any agreement reached privately, even if recorded in writing and signed by both parties, is not legally binding unless it is incorporated into a court order and approved by the court.

Until a financial order is made, the parties’ financial claims against one another remain open and can be pursued at a later date. This is not merely a theoretical risk. In Wyatt v Vince [2015] UKSC 14, the parties separated in the mid-1980s, divorced in 1992 and had very limited assets at the time. Years later, the husband went on to build a successful wind energy business worth many millions of pounds. More than two decades after the parties had separated, the former wife was permitted to pursue a financial claim against him. The Supreme Court confirmed that there is no statutory time limit for bringing a financial claim following divorce where no final financial order has been made.

The message is clear: regardless of the value of the assets at the time of separation, obtaining a financial order is essential if you wish to achieve certainty and bring financial claims between former spouses to a definitive end.

Orlaith’s Experience: The risk of an informal agreement

One situation I occasionally see is where a couple separate on good terms, reach an agreement between themselves and assume that is the end of the matter. Years later, however, circumstances can change. Perhaps one person receives a large inheritance or builds a successful business, and questions arise about whether financial claims are still open. Without a consent order, they often are. For that reason, I always advise clients that however amicable their separation may be, a handshake agreement or even a signed document is not enough on its own. A consent order provides the certainty that both parties need to move forward with confidence.

Clean Break Orders: Ending Financial Ties for Good

Where you both agree that neither will make any claim against the other, you still need a court order to give that effect. This is a clean break order: a consent order that dismisses your financial claims against each other and severs your financial ties, now and in the future.

A clean break is often the goal, particularly for couples with straightforward finances or few assets, because it provides certainty and finality and prevents either party returning for more later. It is precisely the protection that the husband in Vince v Wyatt lacked. Even if you have agreed to walk away with no claims, that agreement only becomes secure once it is recorded in a clean break order approved by the court.

How the Consent Order Process Works

The process is largely dealt with on paper. Once you have reached the Conditional Order stage of your divorce, a consent order can be submitted to the court, so it is common for the divorce and financial arrangements to proceed in parallel.

As part of the application, both parties must complete a Statement of Information (Form D81), which provides the court with a summary of their financial circumstances and the terms of the proposed settlement. The judge will review the documents to ensure that the agreement is fair in the circumstances. In most cases, if the judge is satisfied with the information provided, the order will be approved without the need for either party to attend court. If the judge has concerns or requires further information, these issues can usually be addressed in writing.

Once approved by the court and the final order of divorce has been made, the consent order becomes legally binding. If either party subsequently fails to comply with its terms, the other can apply to the court to enforce the order. This is a significant advantage over an informal agreement, which may be difficult, or indeed impossible, to enforce if a dispute arises in the future.

Orlaith’s Experience: What people miss in a DIY consent order

One of the most common issues I see with DIY consent orders and online templates is that they fail to achieve what the parties think they have achieved. For example, pension rights may not be dealt with at all, future financial claims may not be properly dismissed, or the practical steps needed to transfer a property or make a payment may be unclear. I have also seen agreements rejected by the court because important information was missing or the drafting was inadequate. Careful drafting matters because a consent order is intended to provide finality and certainty; if key provisions are omitted or unclear, disputes can arise long after the divorce has been finalised.

Financial Order, Financial Settlement or Consent Order: What Is the Difference?

These terms cause a lot of confusion, so it is worth being clear. Your financial settlement is the agreement itself, how you decide to divide everything. A financial order is the court order that gives that settlement legal force. A consent order is the type of financial order used where you have reached agreement, as opposed to one imposed by a judge after a contested hearing. In short, the settlement is what you agree, and the consent order is what makes it binding.

How Much Does a Consent Order Cost?

There are two elements. The court fee for submitting a consent order is modest (currently £62, payable to HM Courts and Tribunals Service). The larger element is the cost of drafting the order and the accompanying statement of information, which is where professional advice matters. A well-drafted order does more than record the headline split; it addresses pensions correctly, closes off future claims, and sets out the practical steps and timing for putting the agreement into effect, all of which are commonly overlooked in templates. Some firms offer fixed fees for straightforward consent orders.

Protecting Your Financial Future

A consent order is the single most important step in protecting your financial position after divorce. It turns an agreement into binding protection, and a clean break closes off claims for good. Treating the divorce as the end of the financial story, without a financial order in place, is one of the most avoidable mistakes in family law.

At Payne Hicks Beach, our family team negotiates financial settlements and drafts consent orders across the full range of circumstances, from the straightforward to the most complex. If you have any questions about financial claims on divorce or preparing a consent order, we would be happy to guide you through it.