Since the new court system was launched last month, it is now a requirement to attempt dispute resolution in relation to financial matters, before starting court proceedings. The court requires you to complete a “Genuine Steps Certificate” to show that you have complied with pre-action procedures including attempting dispute resolution, before any court action can begin. If you’re likely to need mediation for your financial/property matter, here are some tips that may help you prepare for your mediation.
[Preparing for financial mediation…continued]
Dividing up the assets of a marriage can be a high conflict process that leads to lengthy, expensive litigation. Going to mediation with your ex gives you the chance to work out your property settlement with a trained mediator, ideally avoiding the need for court action. The mediator, who is neutral, doesn’t make any calls about who is right or wrong or evaluate the case. They simply help you both understand the options for dividing the marital property and work through the issues in dispute. Just as with a parenting mediation, preparation is key to getting the most out of your financial mediation session. Here are our tips for preparing for financial mediation.
1. Write a statement about your position
It helps to clarify and prioritise the issues in dispute prior to financial mediation. Help your mediator understand where the matter is at, the facts of the case and the sources of conflict. Communicate to the mediator what your consider are the options for ending the dispute and any known areas of agreement or disagreement.
2. Figure out the value of the property pool
Working out the matrimonial asset pool will involve both parties complying with their duty of disclosure. This means each of you needs to disclose all relevant financial information including income, assets, liabilities, superannuation, details of vehicles, values of trusts and similar, property details and appraisals/valuations.
3. Bring your detailed financial worksheet
Ideally you are entering mediation armed with as much information about your financial situation as possible. This will help ensure that you are discussing an accurate matrimonial asset pool. This means establishing values for your assets and debts (you may need to obtain values from a valuer). Identify which assets or liabilities may belong to individual spouses and not the marital pool.
4. Gather your evidence
Make sure you have evidence to back up assertions you wish to make. For example, if you are asserting that you came into the relationship with an asset, or that you received an inheritance during the relationship, make sure you have the evidence to back it up.
5. Figure out your priorities
Before your session, compile a list of issues that you wish to discuss in mediation. Rewrite the list in order of priority. For the important issues, try to briefly write down why they are so important to you, so you can explain this to the mediator.
6. Write down your questions
It helps to bring in a list of questions or comments that you would like to raise in relation to your property and financial mediation. Some of the common issues are described below.
7. Decide what to do about the family home
Do you or your spouse want to keep it? Can you afford to stay in it? Does someone need to be paid out and the mortgage be refinanced? Or do you both want to sell and start fresh? Who will live in the house during the divorce? Who will cover expenses? If you are wanting to keep the property and buy out your ex, it would be prudent to make sure you have sought advice from your bank or a mortgage broker, to make sure finance won’t be a problem.
8. Work out what will happen to super
It may be that you need to consider super-splitting.
Read about recent changes to super and family law.
9. Consider child support issues
Child support payments can be dealt with under an assessment by the Child Support Agency. This will need to be taken into account in working out income and expenses. You may also wish to discuss other, out-of-pocket expenses that could arise and how they should be dealt with.
Read about child support here.
10. Think about contributions
As part of your property settlement the courts would consider each party’s contributions to the matrimonial asset pool. Your mediation session will cover this aspect as it may mean adjustments are required to a party.
11. Think about your future needs
Your property settlement will also need to take into account each party’s future needs and future income earning capacity. This is another aspect you’ll want to have thought about in depth before your mediation session.
12. Know your income earning capacity
Whereas your income might reflect what you are currently earning, it might not reflect your actual capacity to earn. Similarly, if you are unemployed, you still have the capacity to earn. It isn’t about what job you are doing and the pay you are earning. It’s about what jobs you reasonably could do but aren’t, and therefore what you could earn. The courts, when making property settlements, would look at someone’s income earning capacity rather than their income, so make sure you consider this aspect when entering mediation.
Read more about income earning capacity.
13. Remember the goal
The goal of mediation is to end the dispute, not prolong it. Using combative or hostile language, or indulging in name-calling or accusing people of lying, is not helpful. It will move you further away from agreement than you already are. Mediation is not about fighting, it’s about solving.
14. Let go of a “winner/loser” mentality
It’s not about one of you coming out a “winner”. If you go into financial mediation feeling like you deserve to win, you will be disappointed if there’s no resolution to the dispute. You need to be willing to “win some, lose some” when it comes to mediation.
15. Be honest
Don’t risk damaging your credibility by making false statements or even simply exaggerating.
16. Respond, don’t react
It’s an emotional time and everyone knows this. But emotions can be very unhelpful during mediation. If you feel your ex is pushing your buttons, mentally remind yourself to “respond, not react”. You can also ask the mediator for a break at any time if you feel your emotions are starting to overwhelm your ability to negotiate.
17. Make a genuine effort
You’ll need to provide a certificate that states that you took “genuine steps” to resolve your matter with dispute resolution.
18. Don’t feel you are too far apart to ever settle
Or that you are going in wasting your time because you know your ex is unreasonable. People often start at the opposite ends of a spectrum, with their positions diametrically opposed. It’s this polarity of positions that means people find it hard to compromise without the intervention of a neutral third party, ie the mediator. Good mediators know that most couples are not actually too far apart to achieve settlement, but that emotions often lie behind the disputes, pushing people into more polar positions. Your mediator is trained to keep you talking, because the longer you talk, the closer you’ll get to resolution.
19. Enter the ‘zone of bargaining’
Get into the ‘zone of bargaining’ as soon as possible. The experts explain this is when the demand and the offer are each supportable based on the facts. In other words, proposals have stopped being outlandish to one party, and there’s genuine and reasonable proposals to settle. It’s where true negotiating progress is made. Remember that it’s not a sign of weakness to make the first move or first offer. Often, when one party makes a significant move, the other party will be likely to reciprocate, so progress is made.
20. Try on your ex’s point of view
What are their goals and the provisions they want? How might you try to accommodate these in another way in an offer of settlement? Anticipating your ex’s key issues means you can see if there are any areas of overlap with your key issues. Make the effort to try and understand not only what your ex wants, but why, as it might help you find ways to reach agreement. If you identify what your ex wants, you may be able to identify potential roadblocks in advance. This will let you brainstorm ideas to solve the possible roadblock.
21. Express your interest in settling
Putting it out there that you are interested in settling as this shows optimism and positivity and a willingness to resolve the dispute. As long as the offer is reasonable!
22. Know your bottom line
It’s always good to know when you should settle and when you shouldn’t. But it’s not a great idea to come to mediation with unrealistic expectations. We recommend knowing your bottom line: what you will be happy with as a settlement, what outcomes you can live with, and which outcomes are simply unacceptable.
23. Don’t reveal your bottom line too early
Rarely does anyone accept a first offer made, or indeed the first several. Therefore, make sure to leave yourself some wriggle room when you make an offer or when responding to your ex’s offer.
24. Considering settling part of the matter
It may be that you can reach agreement on most but not all issues. Is it possible for you to walk out of mediation with a signed agreement on the matters in agreement? For example, if you can get a signed agreement on marital property if not spousal maintenance.
25. Get some help from a family lawyer
This can only benefit you as you head into mediation. You’ll be armed with knowledge about the family law process, mediation, and best/worst case scenarios. It’s very important you understand your legal rights so you understand what sort of settlement you should aim for. What is reasonable and what would a court regard as “fair and equitable”? You’ll also have an appreciation of the potential outcome of litigation, the costs involved and if any of them can be recovered.
26. Listen to your mediator
A neutral facilitator, the mediator applies a fresh set of eyes to the facts. They may see things from an entirely different perspective to you. They may also come up with creative solutions you hadn’t even considered.
27. Be prepared to be open minded
It’s important to realise you can’t expect to gain everything you want in the mediation. You might find you don’t achieve your ideal scenario, but perhaps a second or third best option. Mediation is going to be all about compromise, to try to see how you can both walk out with as much as you can. But remember that litigation carries risks, including the risk that you walk away having “won” nothing you wanted. Far better to try to nut out a next-best proposal in mediation, than have a judge impose an outcome that you are fervently against.
28. Don’t feel pressured
Even though it’s hoped that separating couples will achieve agreement at mediation, remember that you are the one who has to live with the outcome. Whether to accept any offer is ultimately your decision. And if you feel the only way forward is for a judge to decide the outcome, then go ahead and proceed to litigation. It’s your right to have a trial.
29. Work out how you’ll deal with future interaction
So you’ve had a successful mediation and are walking away with an agreement. But, how can you ensure that things will stay proceeding smoothly? What if someone doesn’t fulfil their side of the agreement? It’s important that on leaving mediation, you have worked out how any future disputes will be resolved. If there are things that might still develop into sources of disagreement in future, how will they be handled? And generally, nut out how you will exchange information and communicate in future.
And there you have our tips for preparing for financial mediation. We can answer any questions you may have about the mediation process. As we specialise in collaborative law, we have worked with and developed strong relationships with excellent mediators over the years and are well placed to refer you if necessary. Or we can assist you with legal advice in relation to a property settlement. Please call Canberra family lawyer Cristina Huesch or one of our other experienced solicitors here at Alliance Family Law on (02) 6223 2400.
Please note our blogs are not legal advice. For information on how to obtain the correct legal advice, please contact Alliance Family Law.