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Third party claims in divorce and financial proceedings

In most cases, divorce involves dealings between two spouses only. However, there are occasions where third parties can become involved in divorce matters.

A financial remedy order binds only the parties to proceedings. Therefore, if there are disputes regarding the ownership of particular assets or the extent of ownership, it may be necessary to add a third party to the proceedings to ensure that the order will also be binding upon them.

In some cases, there may be third parties who claim to have an interest in certain assets. If either spouse challenges the third party’s interest, the third party will then have to defend their interest by intervening in the divorce proceedings.

Who are third parties?

Typically, third parties can be:

  • Family members (siblings, grandparents, parents and so forth)
  • Trustees
  • Commercial partners
  • One party’s new partner
  • Beneficiaries

In what circumstances will a third party intervene in financial remedy proceedings?

Third parties can be joined to proceedings in either of the following circumstances:

  1. Where one spouse in proceedings asserts that the other spouse in the proceedings is beneficially entitled to a property held in the third party’s name
  2. Where the third party asserts that they have a beneficial interest in a property held in the names of one or both of the parties
  3. When a relative has an interest in an asset that forms part of the matrimonial assets

How can third parties be joined to proceedings?

The court will hold a preliminary hearing to determine whether a third party should be joined as a party to the proceedings. If an interest is asserted by a third party, the court will need to consider the extent of the third party’s claimed interest and the merits of the claim.

The court will consider whether it is desirable to add the third party so that the court can resolve all the matters in dispute in the proceedings.

The court will also be mindful of the issue of costs and decide whether it is proportionate to join the third party to the proceedings, given the likelihood of increased court time and legal costs that will be involved.

Any third party claims will need to be determined before a court can issue a final order.

It is necessary for the application for a third party to be joined to proceedings to be evidenced by the third party’s connection to the proceedings. Ideally, the application should be made as early as possible. Third parties require their own separate legal representation.

Possible outcomes?

If joined as a party to proceedings, the third party will be bound by the order of the Family Court and enforcement proceedings can be taken against or brought by, that third party.

It is beneficial to resolve all claims to any matrimonial assets in one set of proceedings, rather than for subsequent litigation to occur following the conclusion of the divorce and financial proceedings.

Divorce proceedings can be a stressful time for all parties involved. However, where there are disputes over the ownership of assets in the marriage, this can become a highly complex situation. There are many steps that can be taken to limit third party interests and therefore avoid the involvement of third parties and disputes regarding ownership of assets in financial ancillary proceedings. Contact our family law specialists to discuss your options.

How can Specters Solicitors help?

If you are dealing with any type of divorce including a third party divorce claim then one of our specialists can help guide you through the process. Get in touch today for a no obligation consultation, fill out our enquiry form or call 0300 303 3629.