Can we save money using one mediator instead of two lawyers through our family law matter?
Many separated spouses want to save money working out their affairs and getting their divorce. Some have heard mediation is a way to save money, which it often is. However, a mediator supplements the parties each having their own lawyers, it does not replace lawyers. This blog explains why.
Separated spouses need one of two things to formalize the settlement between them: a separation agreement or a court order. Most separated spouses resolve matters through a separation agreement as going to trial to have a judge resolve the matters is time consuming and both emotionally and financially draining. The alternatives to court are: negotiation, collaborative practice, mediation or arbitration. All of these alternatives will result in a separation agreement.
Separated spouses always want their separation agreement to be a deal that lasts forever so they can move on with their lives. The alternative of repeatedly re-engaging a former spouse is not desirable because it prevents the spouses from becoming independent from each other, which is the point of divorcing. Certainly, a separated spouse does not enjoy having their former partner drag them through the whole process repeatedly. These are some of the reasons why courts like to respect separation agreements.
One thing that mediators cannot do is draft separation agreements. The Solicitors Act says that the only professional that can draft a separation agreement is a lawyer. Mediators can only write a Memorandum of Understanding, which is not binding. The separated spouses must turn that Memorandum of Understanding into a separation agreement, which usually means getting lawyers to write up the agreement. It is difficult to have a separation agreement that will last without having a lawyer put it together.
The Family Law Act sets out circumstances when the court does not have to respect a final separation agreement. The first of these is that either of the parties did not fully understand the nature and consequences of the separation agreement. This means not only understanding the terms of the contract, but also each spouse’s legal rights in the circumstances. Spouses must not only understand what they are getting but also what they are giving up. As Family Law is fairly complex, the courts have held that to really understand the separation agreement, each party must have had independent legal advice. That means that each spouse must have met separately with a separate lawyer to have their legal rights and the separation agreement explained to them. Mediators are also not allowed to give legal advice to one or both spouses because the mediator is working for both sides and cannot keep one spouse’s concerns or interests secret from the other spouse. Linked to fully understanding the separation agreement is the second requirement that the parties exchange full financial disclosure Exchanging Financial Disclosure Is Necessary for ANY Domestic Contract. Lawyers are trained not only in how to exchange financial disclosure but also how to spot “red flags” that suggests that the other spouse is not being entirely forthcoming. A mediator cannot accuse one spouse of hiding financial information while still keeping the objectivity that is required for mediators.
Finally, the Family Law Act and the cases about enforcing separation agreements say that not only must terms of a contract not violate any of the Law of Contract, which lawyers ensure, but also that the parties must negotiate those terms in “unimpeachable circumstances.” This means that there cannot be a power imbalance between the spouses and neither spouse must be taking advantage of the other spouse’s situation. It also means that each spouse has the time to properly consider the agreement before signing. In addition, during the negotiations the parties must consider all of the factors that the courts expect the parties to consider when negotiating a separation agreement. From a practical standpoint, ensuring the negotiations of the separation agreement meet the standards requires the help of lawyers.
Both collaborative practice and arbitration require that the spouse’s sign agreements just to use them. The essential terms of those agreements explicitly require the parties to have lawyers.
Mediation does save a lot of money and heartache for the separating spouses. It does that by avoiding the long and very expensive court process. Working out a separation agreement through mediation costs a small fraction of the cost of fighting out the issues in court. However, to create a lasting separation agreement, the mediation process requires the involvement of lawyers, it does not replace the lawyers. Generally to save money, the earlier the parties consult with a family lawyer to learn their legal rights and obligations, the better the mediation process works (because both parties know what the proper settlement range is), and the more long lasting is the separation agreement.