The Best Time To Disclose

I’ve been thinking about this a lot lately as I’m doing a talk about financial mediation in Durham on 19th March at a FMA mini conference (cheap as chips and still taking bookings for any one interested) so have had to focus on explaining why I deal with disclosure as I do. As with any financial negotiation involving divorcing couples, disclosure is fundamental to the mediation process. It’s the foundation for establishing how clients reach a settlement that will afford them both the best possible future.

It was so many years ago that I trained as a mediator that I’ve absolutely no recollection of what I was taught about when to get the disclosure. I know that the way I deal with it isn’t how many mediators do. It’s common to hand clients the financial forms at the initial meetings with an instruction to bring them along to the first mediation session. However is that the most effective way forward?

I don’t think it is. For a start it means expecting people who haven’t done this before and haven’t usually got a clue about what should happen (aside from all their other stresses and stains) to complete what is quite a hard task without any guidance. In the second place, just like Form E, the forms used in mediation are only a jumping up point in most cases. A heap of bank statements and salary slips don’t actually assist in establishing agreed valuations for property, what people’s future housing needs are or, crucially, borrowing capacity. So, even if everything is supplied as required, how often does that actually move things forward at a first session?

Beyond that is the fact that at that stage, clients have no real idea of what mediation will be like. How many mediators have clients turn up for first sessions without a fair degree of anxiety? I feel that one of the important functions of a first mediation session is to allow clients to settle down into the process, understand what it’s all about and feel that it’s safe and that the mediator really does offer a safe pair of hands.

And there is so much else that’s important to cover. Is there to be a divorce if one’s not been started. If not, there’s an often tricky discussion about who is the petitioner and what the allegations may be if it’s to be a behaviour petition. Why? Apart from anything else, so there’s an established vehicle to render any settlement legally binding, either a divorce or a separation agreement.

Then there’s the need to give legal information about what orders courts can make and the legal factors which apply. For clients that’s when the whole basis of decision making begins to assume a degree of coherence and make sense. Also, once clients know that what their reasonable needs are is a legal factor, they see that completing the future outgoings section has an important purpose rather than just being a tedious exercise.

Beyond that, discussing what is to happen to achieve agreed property valuations, establish future housing needs, borrowing capacity, who will supply disclosure as regards joint assets and working in anything that’s necessary for a particular couple (for example company management accounts and base figures to estimate CGT), helps create a joint sense of purpose. Set in context, the completion of disclosure makes sense. It also becomes a joint endeavour.

In many ways most importantly of all, rather than plunge immediately into a consideration of financial detail, it means that the first session can be used for dealing with discussions about vital none financial issues, in particular child arrangements. There are very few mediations I’ve done where there hasn’t been something that needs to be discussed about children even when, on the surface, everything is hunky-dory.

Don’t get me wrong. If it’s clear from the initial meetings that interim financial issues are a live topic, we have outgoings completed before the first session so that can be dealt with. However I feel that we end up with more complete disclosure that establishes a solid platform for very detailed discussion at a second session if the disclosure doesn’t come first. Added to that, clients leave hopefully with a sense of the underlying structure on which a settlement will be based and with an understanding of why the disclosure matters. It’s after all not just an exercise in destroying trees.

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