For many people engaged in family court proceedings, obtaining a final order is sometimes just the first step in a long and painful process to actually receiving monies due.
The Law Commission has recognised this difficulty and their 2015 consultation paper number 219 analyses the current mechanisms available and proposes some alternative mechanisms which could be adopted in relation to family financial orders. As a team, we have been very interested to consider this consultation paper as many of our clients require assistance on enforcement issues.
Why is enforcement in family court proceedings necessary?
Enforcement proceedings may be necessary where a final order has been made and the paying party does not pay sums due under that order. The order may provide for lump sum payments, or periodical payments (like maintenance) but sometimes the paying party refuses to cooperate or comply with the terms of that order.
As a preliminary point, if the paying party does not accept the content of the order, he or she may appeal or apply to vary the order. Simply failing to comply with the terms of the order is not appropriate, although the reality is many paying parties do not pursue appeals or variation applications and simply fail to make the appropriate payments. This places the burden of enforcement on the receiving party, who is often the financially weaker party and ill-equipped to pursue further legal action.
What the Law Commission reports suggests, and we agree, is that the current mechanisms for enforcement are not always straightforward to engage, particularly for litigants in person (that is, people acting without the assistance of solicitors). Streamlining and simplifying existing procedures may make them more accessible to the public.
The main options currently available are seeking an order to obtain information about the debtor; or else a general enforcement application. Both applications require a degree of cooperation from the paying party, which often results in difficulty for the receiving party. Information requests do not apply to those living abroad, which is a further hurdle.
A further option is to direct that payments are made into court, if the order is for periodical payments – and the court then takes its own enforcement action. We understand that this is not used often, and the success of this option is not known.
We believe that all existing methods of enforcement should remain available, with the addition of new methods and improvements to the system so that receiving parties are not limited in the routes available to them.
Improvements to existing mechanisms
The Law Commission discusses whether the law needs to be consolidated, so it can be found in one place. We had mixed views on this. On one hand, the existing Family Procedure Rules (FPR) were enacted as recently as 2010 and are lined up with the parallel Civil Procedure Rules (CPR); on the other hand, we felt an update to the FPR to incorporate all enforcement rules would streamline the process.
A further preliminary point considered in the report was whether the law should be more proactive at the point of making the order, to minimise the risk of enforcement becoming necessary. We wholeheartedly agree that proactivity would be beneficial. One option already available but perhaps underused is that of ‘secured periodical payments’ and we think that adopting this as the ‘norm’ would assist receiving parties in the event of default. Another step which we think should be adopted as the ‘norm’ is the power for the court to execute documents in place of the parties – which is a power currently available to the court, but currently requires a separate application (and therefore further cost/ delay for the party not at fault).
The report considers whether an attempt at alternative dispute resolution (ADR) should precede any application for enforcement. We do not think that this should be mandatory. ADR requires cooperation between the parties; enforcement typically becomes necessary only once the parties’ relationship has completely broken down. ADR can, of course, remain an option for those willing to undertake it.
The report asks whether information for litigants in person and the public should be updated. We absolutely think it should. Guidance needs to explain the options available in simple terms, be centrally available; and cover all aspects of enforcement. We think guidance should be issued at the point a final order is made, setting out to both parties the options of variation, remission and enforcement. This guidance could also warn parties that failure to comply with the terms of the order may result in details of their employment, address or finances being disclosed to the other party further as part of the enforcement process – which might serve as a further deterrent.
This leads us on nicely to the issue of disclosing information to the receiving party. The report asks whether information (about the debtor’s current address, employer, assets etc) should be disclosed to the receiving party. This is another area where we have mixed views. On the one hand, if the court, rather than the parties, holds information disclosed, this provides a paying party with a degree of confidentiality. The difficulty with this approach is that the court is likely to be underfunded and less well-equipped to use the information received effectively, resulting in further delays and frustration for the receiving party. The alternative would be to make the information available to the receiving party. Advance warning about this (for example, at the point a final order is made) could act as a deterrent to a paying party when considering a default, and the release of such information to the receiving party could speed up the process. On balance, we feel that leaving the information in the hands of the court may be most appropriate, provided that the court has sufficient resources to deal with that information proactively. Tracking information through HMRC/ Land Registry/ Companies House or other agencies may also assist, so that the enforcement process continues seamlessly whenever a debtor starts a new job.
The Law Commission asks whether advice in person should be available to the parties. Again, we think it should. All too often, the financially weaker receiving party is simply unable to fund legal advice and unable to comprehend the existing rules, meaning they simply give up. The cut backs in legal aid have undoubtedly compounded this issue. Additional funding or support for the PSU might be a way to deal with this proposal. Without proper funding, this suggestion has no strength – and more consideration needs to be given to the qualifications of those administering such advice and how it is monitored
More generally, we think that enforcement training should be rolled out to all judges and family lawyers. Training only a select few ‘designated’ enforcement judges would likely cause further delay for parties seeking enforcement.
One vexed issue is whether or not there should be enforcement against joint accounts. We find this difficult as there may be joint account holders who do not know about the debt in the background until it is enforced against joint assets. A presumption of 50:50 shares in joint assets would be the necessary start point, but may not offer sufficient protection. If, however, the court does not have recourse to such assets on enforcement, then putting assets into joint names would be an obvious avoidance technique. Whilst we think that enforcing against joint accounts should be a potential option, it seems to us that it should be an option of last resort with adequate safeguards place.
The report asks whether financial disclosure should be required as a matter of course from the debtor. This again requires proactivity and cooperation from the debtor, and therefore we think it would be more appropriate to start with a presumption that the debtor can pay, with an opportunity for the debtor to rebut that presumption by providing financial disclosure. Options for the debtor could therefore be a) pay the arrears; b) show (with evidence) an inability to pay the arrears (coupled with perhaps a discrete application to remit) or c) an application to vary.
On the issue of costs, we feel it is not fair for a receiving party to bear the burden of enforcing a financial order. Therefore, we think that costs should follow the event and the receiving party should recover their costs from the defaulting debtor.
Proposed new enforcement
Interestingly, the report floats the idea of three additional coercive measures which could be introduced to encourage debtors to comply with orders made against them. These include disqualification from foreign travel, disqualification from driving and curfew orders. As a team, we have mixed views on these proposals. In particular, we have concerns that a curfew order may be too draconian, although potentially justified as an option of last resort.
The Law Commission is clear that a distinction needs to be drawn between those who can’t pay and those who won’t pay, the latter group being subject to a much more rigorous approach. We agree with this, and with the need to make a distinction. Overall, it is clear that some reform is needed in this area and we agree with the Law Commission in this regard. We have fed our comments back on the consultation and can now only watch this space, to see what outcome if any is realised.
You can contact Justine Osmotherley from our Family team on 0113 336 3323 or by email at email@example.com
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