Cheap divorce New way of splitting assets
Rob Stock finds an alternative to the courts for couples divvying up their property assets.
Dividing relationship property when a marriage breaks down can now be done online, and it could save parting couples a fortune.
An online disputes business created by former solicitor general Michael Heron has just handled its first relationship asset division.
Every year there are more than 8000 marriage dissolutions in NZ, and in each case relationship property needs to be divvied up between the two halves of the former couple.
But Heron, who as solicitor general was New Zealand’s second highest-ranking law officer, says court is not an economic place to do it, especially for people with combined assets of less than half a million dollars.
‘‘If you go to a lawyer, they will tell you it is not economical to litigate that amount through the courts,’’ Heron said.
‘‘It would be more than $100,000 in legal fees and court costs easily if it were to go right through to a hearing and decision.’’
Using Heron’s CODR service, which stands for Complete Online Dispute Resolution, the cost could be as low as $5000 each.
There’s no such thing as a ‘‘quickie’’ divorce in New Zealand. The law requires married couples to live apart for two years before they can apply for a divorce.
But when it comes to splitting relationship property, Heron believes CODR could make the process much faster.
Fighting through the courts for a settlement would take more than 24 months, he said.
Through CODR, the end-to-end process could take a matter of days.
Couples who opt to use CODR to decide on a fair split of their relationship property have to get independent legal advice before committing to the process, said Heron.
Once they decide to go ahead, they agree to be bound by the decision of the expert QC and arbitrator who are appointed to decide on a fair property split.
They then both submit their information through online forms.
The very first property split has just happened through CODR, Heron said.
It cost the couple $10,000, and it only took two hours via an online hearing.
Setting up two homes after a separation has become very expensive with property prices being so high. Keeping legal costs down leaves more money for the parting couple to get back onto the property ladder independently of each other.
Heron believes online legal dispute mechanisms could end up making civil justice more affordable, and accessible.
Systems like CODR, which can be used to decide on all manner of civil disputes, could play a part in making that happen, allowing people of their lawyers to run disputes online, provided both parties agree.
All around the world legal dispute resolution, and lower courts were moving online, Heron said, with Britain leading the world.
The current court and tribunal systems were just too slow, and too costly.
‘‘If you look at the numbers of civil cases that go through our district court each year, which has a jurisdiction of up to $350,000, it’s 600-700 cases. That’s tiny.’’
‘‘People just don’t bother,’’ he said.
In the UK, all divorcing couples will soon be able to formalise their splits online.
In New Zealand divorce remains a big business. In 2016, the Family Court granted 8100 married couples and 69 civil union couples a divorce, figures from Statistics NZ show.
Analysis of divorce statistics by year of marriage shows 38 per cent of people who married in 1991 had divorced before their silver wedding anniversary.
It is not economical to litigate that amount through the courts. Michael Heron