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Money Saved or a Fool’s Bargain

Money Saved or a Fool’s Bargain

Is it wise to negotiate your own family law settlement?

Sound investment advice includes spending money on the right things. Where spending money stands to either make you money or save you money in excess of the amount spent, that is normally a wise investment. Many people negotiate their own resolution to family law issues which begs the question of how wise this course of action is.

In many if not most cases, the breakdown of a relationship marks the most significant financial transaction in a person’s life. There are claims to divide all of the property and debt held by the couple and potential claims for both child and spousal support. The ranges of potential outcomes can easily swing in the hundreds of thousands of dollars. Failing to even know what your rights are places you at risk of arriving at a bargain where you give up far too much.

For example, by giving up spousal support a person can be giving up literally hundreds of thousands of dollars of support over years and consigning themselves to financial hardship.

It is perhaps understandable however that people choose to forgo obtaining legal advice. Lawyers are expensive and we all have heard stories of people who have wasted much of their assets on lawyers and the legal process in messy family law fights. Where is the balance then?

As with most things, a sense of proportionality is important. Many people exit relationships with steadfast views over what they and the other partner are entitled to which may or may not be in line with the prevailing law. Obtaining a little bit of legal advice through consultation will at least give you a good sense of the law as it applies to you.

A good lawyer is one that not only knows the law will also help you in arriving at a course of action that is proportionate and does not threaten to spend $100 to obtain $50. You should be asking questions before agreeing to a course of action to understand what the anticipated costs will be. While many lawyers charge by the hour and cannot give you a precise number, they should be able to give you a rough idea of at least the range. You should also be asking about your chances of success.

However, while many people focus on the risks of protracted litigation in court and the costs that this incurs, far more people fall prey to agreeing to settlements that significantly hurt their interests.

I presently have a number of files were parties tried to come to an agreement without the benefit of lawyers whatsoever that blew up and has now resulted in protracted litigation. The reason for this is that once an agreement is arrived at, parties are often wedded to it and are understandably upset where the other party wishes to override that agreement. However, where neither party had all the documents necessary to know what they might be entitled to and did not know their rights, an argument develops that they did not fully understand the agreement that they are entering into, or at least not what they were leaving on the table.

Cases dealing with one party trying to overturn an agreement tend to be more intensely litigated and more expensive. Invariably, those people end up spending more money in legal fees than they would have had they retained lawyers at the outset. The idea that hiring a lawyer early saves money and stress applies in many areas. For example, those looking to really streamline the process they enter into cohabitation agreements drafted by lawyers.

The courts appreciate that on separation people are going through an emotional time. They also understand that there are power dynamics between couples that often leave one spouse more vulnerable. For this reason, on an application to overturn a settlement, the court looks carefully to the circumstances surrounding the agreement arrived at. Competent legal advice will help steer you towards an agreement that raises fewer concerns regarding power imbalances or allegations that one spouse took advantage of the other.

Agreements arrived that without the benefit of legal advice are often deficient in their construction which also leads to arguments that the agreement is unclear on certain key points. That can also lead to a court potentially overturning the agreement on application. Free or low-cost separation agreements ultimately prove to be anything but that when they result in litigation to overturn them or they result in bad deals.

At the end of the day, everyone who arrives at a settlement in family law proceedings is looking for certainty and a durable resolution. They are looking for a fair settlement, at least from their perspective. Both of these objectives are more likely to be obtained with at least some legal advice.

There are a number of means through which to reduce one’s legal fees in the context of separation. This includes retaining a lawyer that is not as senior and charges less per hour or retaining a lawyer on an “unbundled” basis whereby the letter does not go “on the record” as your lawyer but advises you on an as-needed basis.

Similarly, when parties choose to mediate family law disputes, it must be remembered that the Family Law Act requires that any family law mediator be certified and approved by the BC Law Society to conduct a family law mediation. Approval to mediate is not restricted to lawyers. There are a number of non-lawyers across the province that are qualified and quite competent in running family law mediations. Part of their training however is to know when to refer parties out for independent legal advice.

As they say, “all things in moderation”, a statement that applies to legal advice on separation. An ideal pathway for parties on separation to take is to obtain some legal advice but for them to steer away from protracted litigation by obtaining good legal advice and compromising where necessary. With low-cost options to obtain summary legal advice available, it is not wise to proceed through a separation to settlement without any legal advice. Doing so not only threatens to result in a settlement where you accept far less then you are entitled to but it may result in anything but certainty but rather an even more stressful and costly dispute.

Michael Sinclair is a family law and estate lawyer at Doak Shirreff Lawyers LLP. Click here to connect with Michael. He can also be reached at [email protected] or 250-979-2521.