NEWS: 18 Things You Can’t Get in Court by Lorne Wolfson


The Lawyers Weekly

Eighteen Things You Can’t Get in Court

by Lorne Wolfson

[Article in Full Below]

“Skilled family mediators and negotiators will emphasize to parties the things they can obtain in a settlement, but not from a court.”

Here are 18 of them:

1. Confidentiality

The courts are very reluctant to order the sealing of a court file. Since a reported decision may attract the attention of creditors, Canada Revenue Agency, Children’s Aide, the police, professional discipline bodies, business competitors, even the media, confidentiality can be important to many spouses.

2. Non-variability of support

Support orders are generally variable in the event of a material change in circumstances. It is rare that a court will make a support order that is non-variable. Settlement offers the opportunity for a non-variable support arrangement.

3. Review of support

The party who initiates a variation must prove a material change in circumstances. A review is a fresh look, which is scheduled at a pre-determined date. While most judges believe they do not have the jurisdiction to impose a review, the parties can include it in a negotiated agreement.

4. Formula for determining income

By agreeing to a formula, often the parties can simplify the income-determining process, thereby saving legal and accounting costs.

5. If and when division of income

Where a party is a beneficiary of a discretionary trust or has options or restricted share units that may or may not pay any benefits in the future, a more practical option (available in settlement, but not from a court) is to divide the asset on an “if and when” basis.

6. Release of spousal support

A court order for no spousal support does not preclude a party from claiming spousal support in the future. A spousal support release on the other hand, prevents the claimant from ever asserting such a claim.

7. Swapping/sharing assets

A court has no jurisdiction to require one joint owner to purchase the interest of the other, to require parties to swap assets or to divide chattels on any basis other than ownership. One joint owner may purchase the interest of the other at current values. Where the parties agree to treat an asset as if it were jointly-owned, they can avoid a dispute as to who benefits from the post-separation changes in value.

8. Assuming debts

A court cannot order one party to assume the other party’s debts or share a joint debt. Where one party retains jointly-owned property, it will usually make sense for that party to assume sole responsibility for any associated debt. While a creditor cannot be forced to co-operate, usually the problem can be resolved by refinancing or an indemnity.

9. Paying support directly to a third party

Often a party is prepared to pay support to a third party, but not to the other spouse. Courts are very reluctant to put strings on the money in the recipient spouse’s hands. Where the payor’s concern is an impediment to settlement, a carefully drafted agreement can often overcome this obstacle.

10. Custody/access concessions in exchange for financial benefits

Courts will generally treat custody and access issues separate from support issues. While some may find trading custody/access concerns for financial benefits to be morally and legally repugnant, others will acknowledge that it happens anyway in most settlement negotiations.

11. Creditor-proofing

While judges must be very cautious about making orders in family law cases that affect the rights of third party creditors, many parties will negotiate “friendly settlements” to protect the family’s assets against their creditors.

12. Settlements involving third parties

A court order will not end the involvement of third parties who are not parties to the litigation nor will it resolve a dispute involving third parties. Only a comprehensive multi-party settlement can resolve all issues, including all claims by or against third parties.

13. Support adjustment clause

A payor whose income is uncertain may be reluctant to commit to a support deal that assumes a level of income that he may not actually receive. One solution is an automatic support adjustment formula.

14. Dispute resolution clause

Many separation agreements contain a dispute resolution clause that provides for cost-effective mediation/arbitration of future disputes.

15. Parenting co-ordinator

A parenting co-ordinator is a mental health professional who has training in resolving custody and access disputes. Ontario courts do not have jurisdiction to appoint a parenting co-ordinator unless the parties consent. As a result, this valuable dispute resolution resource can only be available through a settlement.

16. Arbitration of division of chattels

A mediator/arbitrator can design a summary process whereby the parties’ chattels can be divided on a an equitable basis, thereby avoiding a judicial sale.

17. Experts: quick and dirty/joint/binding/hot-tubbing

An expert can provide an informal report for settlement purposes at a lower cost than a formal court-ready report. The experts can be brought together (“hot-tubbing”) to discuss differences between their opinions, with a view to either reaching a consensus or at least narrowing their differences.

18. Creativity with taxes

Negotiated agreements can allow the parties considerable scope for creativity in structuring their affairs in a tax-efficient manner. Once the parties understand that the pie can actually be made larger, they may be less concerned as to which spouse gets the larger piece.

Article Originally Published: 2012.February.17