How mediation in farming divorce can offer solutions
© Scharfsinn86/Adobe Stock Divorce can be messy, and when a farm business is at stake the challenges can be complex.
Dividing up assets that are tied up in family history and land, and often provide the main income source for both parties, comes with an added layer of difficulty.
However, mediating divorce cases that involve family businesses can provide flexibility that is often absent when lawyers are involved, allowing for practical and reasonable solutions, says David Hooper, a consultant at Brown & Co specialising in dispute resolution.
See also: The divorce process – what farming families need to know
Where the farm business existed before the marriage, mediators can offer an independent ear on remuneration.
“Mediation saves on the expense of fighting everything through the courts, and puts the decisions back in the control of the individuals,” says Mr Hooper.
The division of assets in a divorce when the marriage has existed for some length of time is often based on an assumption that they will be evenly split.
This will be difficult, if not impossible, to achieve without forcing the sale of the farm, Mr Hooper points out.
“There is not going to be the cash assets to allow the person leaving to have 50% of the valuation while leaving the farm intact,” he says.
Mediation can bring creative solutions to this problem.
“The idea behind mediation is to get the people involved to focus on what the problem is and the solutions available, to sign on to the idea of a collaborative divorce, rather than getting the maximum slice of the pie,” says Mr Hooper.
For instance, with both parties often relying on the business for their source of income, they may see the financial sense in keeping the farm intact and for the party splitting away from the business to initially get an income generated by the farm.
At some point in the future, at an agreed date, that party will also get a proportion of the capital while being adequately provided for in the meantime.
Mr Hooper says this can work in a farming situation because a departing spouse will often want assets passed to children from the marriage
This outcome is less likely when solicitors are involved, he suggests, as it is their remit to get what they see at the best financial settlement at that point in time for their clients, without considering the unique circumstances of farming families.
Commercial mediation of this type typically costs each party £2,000 plus VAT, but can run to more than double this amount.
Family mediation in a divorce situation
Family mediation, rather than a commercial mediation involving business assets, is a process and service supported by the family courts as a way to give two people a safe space with an accredited professional.
This gives them the chance to identify the decisions that need to be made about property, finance and children during a separation and to reach an agreement.
The process starts with a mediation information and assessment meeting (Miam), says Michael Mack, chief executive officer of the Family Mediation Trust.
The Miam is run separately for each party to enable the mediator to understand the issues and assess if mediation is the most effective approach.
The parties then come together with the mediator for a number of sessions to reach an agreement.
In most cases mediation takes two to three sessions to reach an agreement, says Mr Mack.
It has the advantage of enabling both parties to stay in control of the decisions being reached, in contrast to a court, where the judge will make the decisions, he says.
“It can be completed in a number of weeks, not years, and for many the total costs can be less than £500 from start to finish for both parties.”
The Family Mediation Trust’s fees are:
- Mediation assessment meeting: £119 per party
- Subsequent mediation sessions: £180 each, per party.
A standard child case would run to two mediation sessions, so £479 in total for each party, says Mr Mack.
The government is also providing a £500 voucher towards the mediation costs for child cases at present, bringing the fee in this case down to a total of £229.Â
Property and finance cases do not get access to the voucher, and those cases are more likely to run to three or four sessions. At the top end this would be £839 for each party.
A family mediator has to be accredited with the family mediation council.
Family mediation is very different to commercial mediation, which is a process for settling an issue about the business, says Mr Mack, rather than family issues around a divorce or separation.
“The courts have big backlogs and are increasingly referring cases to mediation,” says Mr Mack.
Some issues may be linked to the farm assets and property, but this does not mean that a decision cannot be reached.
“Mediation often runs in parallel with a court process and agreements reached through mediation can be made into a court order,” says Mr Mack.
It is also possible for a legal professional to join the mediation process to help a party reach a decision.