Divorce in farming families
The future of farming: keeping divorce out of the courts
Whilst it is the case that any divorce is complex, this is most true of those cases which involves farmers and their assets. As well as the usual considerations involved in dividing the assets of a marriage, there are particular circumstances which are largely unique to the farming community. Often one of the biggest of these is whether the farm has been passed down through generations and how it may be preserved for future generations whilst meeting the needs of an outgoing spouse and the children of the family; the so-called dynastic cases. In addition, with many farming businesses the very ownership of assets (or even parts of assets) may be unclear as there are often partnerships and limited companies as well as trusts in place. Getting to the bottom of these issues and dealing with matters such as liquidity and the ability to raise capital and income, without adversely affecting the ongoing operations of the farm, is far from straightforward and will likely require specialist advice from a number of professionals.
Considering alternative dispute resolution
Bearing in mind the potential complications involved, choosing the correct manner in which to resolve financial disputes consequent upon the breakdown of a marriage will be imperative for the farming family. Due to the continued and worsening delays in the Family Court system, methods of alternative dispute resolution (ADR) are becoming increasingly useful and thus popular.
Perhaps the most well-known form of ADR in the family law context is mediation. This is a process whereby the parties will attend meetings (usually unrepresented) with a mediator at which they will attempt to come to an agreement as to a way forward. The mediator is on- hand to guide the parties through the process and towards a decision but is not there to give the parties any legal advice or personal views. If an agreement is reached it will be recorded in a document known as a Memorandum of Understanding which both parties can take away and seek such professional advice thereon as they believe necessary. It is worth noting that this Memorandum of Understanding is not legally binding.
Another form of ADR is collaborative law. This is where both parties instruct a collaboratively trained family lawyer who will represent them in the process. Dealing with matters collaboratively involves the parties and their lawyers meeting together at four-way meetings to discuss their circumstances and work together to find a resolution which suits both parties and, indeed, the wider family in the context of farming divorces. There are many advantages to engaging in the collaborative process, not least the fact that no-one will understand the farm and how it works better than the family at its very heart. Moreover, unlike mediation, both parties will have their own lawyer on-hand and engaged throughout the process to give such guidance and advice as they require.
If matters cannot be resolved by agreement, it is still possible for a decision to be reached without an application to the Court being made as the parties can sign up to arbitration. Arbitration is, in essence, a private adjudication of a dispute, where the parties jointly agree to appoint their own private judge. The judge would likely be a senior family law barrister or QC. The parties can therefore select a judge based upon the complexity and value of the issues involved. This is of untold advantage to farming families who can select a judge who is well versed in the vagaries of farm life and business operation. Arbitration is flexible and can be timetabled to suit the parties; delay can be reduced as the parties are not beholden to the backlog of Court cases waiting to be heard; and, unlike mediation and collaborative law the decision made within the arbitration process will be binding upon the parties giving them certainty of an outcome.
Upon separation it is important to take advice to establish what options are available in the hope that the future of the farm and both parties can be secured.
For more information please contact our Rural Community Family Law team
This article was first published in the January 2019 edition of South East Farmer.