Understanding the Importance of Financial Disclosure in Family Mediation

Ontario family law emphasizes the importance of making decisions based on full financial information and the exchange of financial disclosure is a cornerstone of the mediation process when couples separate and divorce.

Amicable family mediation participants sometimes question the necessity of exchanging financial information. Common objections we hear to the recommendation that mediation participants exchange financial disclosure are that both participants are already aware of one another’s finances, or that they do not intend to divide certain assets or collect support from one another and therefore do not need to see financial information from one another.

Given this, we thought it might be helpful to explain why exchanging financial disclosure is crucial to the family mediation process in Ontario.

Trust and Transparency

A successful family mediation process ideally requires the establishment of trust between participants. Financial transparency is one of the ways in which this trust is established. By revealing their assets, debts, and incomes, mediation participants gain full knowledge and understanding of each other’s finances. Through the financial disclosure process, mediation participants often gain a deeper understanding of their own finances as well. Having a full picture of their entire family finances is an important part of negotiating fair and equitable agreements that meet the needs of all involved.

Facilitating Informed Decision-Making

Completing the exchange of financial disclosure ensures that mediation participants have the information they need to make fully informed decisions as part of the mediation process.

An important aspect of making informed decisions is for mediation participants to understand how the terms of any financial agreement they are considering compares with the law.

It is the role of independent lawyers to explain to mediation participants their financial rights and obligations under the law. Financial disclosure is a mandatory part of the court process in Ontario, as the legal model for the division of family property and the determination of child and spousal support is based upon participants’ financial information. For a lawyer to be in a position to provide proper legal advice to a mediation participant, the lawyer should have access to complete financial disclosure from both mediation participants just as they would if the matter were in court. You can learn more about the role of lawyers in the separation and divorce mediation process in our blog Will We Need Lawyers if We Mediate Our Separation and Divorce in Ontario?

Exchanging financial disclosure as part of the mediation process ensures that mediation participants have access to all the information they need to make fully informed decisions, including accurate legal information and advice from their lawyers.

Compliance with Legal Requirements

The failure of a party to make full and accurate financial disclosure is one of the grounds upon which a Separation Agreement may be set aside in Ontario.

Therefore, exchanging financial disclosure as part of the mediation process and prior to signing a Separation Agreement, helps to protect the validity and enforceability of any Separation Agreement arising out of the mediation process.

Even where there exists signficant trust between mediation participants, providing complete and accurate financial disclosure is an important aspect of each participant meeting their individual legal duties and protecting themselves from the risk that their final agreement could be set aside in the future.

Financial Disclosure Options

As part of a family mediation process that is conducted outside of a court proceeding, mediation participants have options as to how they go about exchanging financial disclosure with one another. These options include:

1) Exchanging individual Financial Statements and disclosure briefs: Financial Statements are documents that each participant completes individually, listing their assets and debts on date of marriage (if applicable), date of separation and the date of the statement, and setting out their current income and expenses. Financial Statements are usually sworn documents, meaning the party will sign the document and swear to the truth of its contents in the presence of a commissioner. Along with sworn Financial Statements, supporting bank or other statements to affirm the accuracy of the information in the Financial Statement are usually also exchanged. Commonly, sworn Financial Statements are prepared with the assistance of a lawyer.

2) Exchanging disclosure documents and preparing a joint Net Family Property Statement: As part of the mediation process, participants may also choose to exchange financial documents with one another and work jointly with a neutral facilitator (either the mediator or separate certified divorce financial specialist) to prepare a joint Net Family Property Statement, without first preparing individual Financial Statements. A Net Family Property Statement is a document that lists each participant’s assets and debts as at their date of marriage and date of separation and is helpful in assessing the parties' respective property rights and obligations under the law in Ontario.

It is recommended that mediation participants consult with their independent lawyers regarding the benefits and potential risks of their disclosure process options.

Conclusion

The exchange of financial disclosure is not merely a procedural requirement but rather a fundamental aspect of the family mediation process where financial issues are involved. By embracing financial transparency, mediation participants lay the groundwork for constructive dialogue, informed decision-making and fair resolutions. Whether navigating property division, support obligations or other financial matters, exchanging financial disclosure empowers individuals to achieve mutually acceptable outcomes with confidence and integrity.

At Teal Family Mediation, we recognize the importance of financial disclosure in the mediation process. Our mediators help guide participants through this critical stage of the process with professionalism and experience. Together, let’s navigate your family law matters with clarity, compassion and respect.

Disclaimer: nothing in this blog post should be construed as legal advice. Should you have questions about your legal rights and obligations, or about your legal process options when you separate, you should consult with a lawyer to receive independent legal advice.

We can work it out. Together.

Teal Family Mediation is team of professional divorce mediators located in Hamilton, Ontario offering mediation services for separating married and common-law couples and co-parents. We provide an alternative to high-cost, inefficient and adversarial court proceedings with an affordable, modern and compassionate approach towards resolution.

We offer services in-person at our offices located in the Ancaster, Meadowlands and virtually from anywhere in Ontario.

 

Let’s Connect:

Is Family Mediation Mandatory When Couples Separate or Divorce in Ontario?

When facing separation or divorce, many couples in Ontario consider mediation as an alternative to traditional litigation. However, a common question that arises is whether mediation is mandatory in Ontario. In this blog post, we will explore this question, the benefits of mediation, and how it fits into the family law process.

Understanding Mediation

Mediation is a voluntary process where a neutral third party, known as a mediator, helps separating or divorcing couples reach mutually acceptable agreements. This process can cover various issues such as property division, spousal support, child support, and parenting arrangements. In mediation, unlike in court, the mediator does not act as a judge to make decisions for the couple about resolving their issues. Instead, the mediator's role is to facilitate dialogue and help the parties reach a mutually agreed-upon resolution themselves.

Is Family Mediation Mandatory in Ontario?

Attending mediation is not mandatory for couples who are separating or divorcing in Ontario.

However, mediation is strongly encouraged under federal and provincial laws and recommended by family court judges as a means to resolve the issues arising from separation including parenting, child and spousal support, and the division of assets.

What does the Canadian Divorce Act say about family mediation?

Section 7.3 of the Divorce Act, which applies to married spouses in Canada provides:

To the extent that is is appropriate to do so, the parties to a proceeding shall try to resolve the matters that may be subject of an order under this Act through a family dispute resolution process.

Mediation is a family dispute resolution process as defined by the Divorce Act.

This means that under the law in Canada, married spouses are required to try mediation or another out of court family dispute resolution process such as negotiation or collaborative law before applying to court, unless it would be inappropriate to do so.

Section 7.7(2)(a) of the Divorce Act further provides, “It is also the duty of every legal adviser who undertakes to act on a person’s behalf in any proceeding under this Act, to encourage the person to attempt to resolve the matters that may be the subject of an order under this Act through a family dispute resolution process, unless the circumstances of the case are of such a nature that it would clearly not be appropriate to do so.”

This means that lawyers also have a positive duty to encourage their clients to attempt to resolve matters through mediation or another family dispute resolution process, unless it would be clearly inappropriate in the circumstances of the case to do so.

There is no definition in the Divorce Act as to when it would be inappropriate to try to resolve matters through mediation or another family dispute resolution process, but generally applications to family court should made only when necessary, such as situations where there is an emergency or safety concerns requiring a court order, or when out of court dispute resolution options like mediation have been exhausted.

What do the provincial Ontario family laws say about mediation?

The Ontario Family Law Act , which applies to married and common law spouses and governs property and support issues, permits the Court to make an Order appointing a mediator.

The Children’s Law Reform Act, which governs parenting issues between unmarried spouses, also provides that the court may appoint a mediator at the request of the parties.

The Family Law Rules in Ontario further permit a judge to make an order combining otherwise mandatory and case and settlement conferences into a single court appearance where the parties have attended mediation and provided certain conditions have been met. Attempting mediation before applying to court can therefore potentially shorten the length of the court process, should court ultimately become necessary to resolve a dispute.

These laws are intended to promote the use of mediation. Family court judges commonly rely upon them to encourage parties to attempt to resolve issues through the mediation rather than court wherever possible.

Therefore, while mediation is not mandatory for separating families in Ontario, the current laws and decisions of family court judges strongly signal that other than in certain limited circumstances, mediation or another family dispute resolution process should be attempted prior to applying to court.

Even in contentious circumstances, there are many benefits to trying mediation before applying to family court. These benefits include saving time and money, reducing stress, maintaining autonomy over the outcome of your situation, and minimizing future conflicts.

You can learn more about the mediation process and its benefits in our posts on How Does Mediation Work for Separation and Divorce in Ontario and What Are the Benefits of Using Mediation When You Separate and Divorce in Ontario?

If you’re interested in learning more about mediation and collaborative law, and the distinction between these two family dispute resolution processes, you can read more about that topic in our post on Understanding Mediation, Collaborative Law, and Collaborative Mediation.

Disclaimer: This blog is for informational and educational purposes only, and none of the information in this blog post should be construed as legal advice. Should you have questions about your legal rights and obligations, or about your legal process options when you separate, you should consult with an independent lawyer to receive legal advice.

We can work it out. Together.

Teal Family Mediation is team of professional divorce mediators located in Hamilton, Ontario offering mediation services for separating married and common-law couples and co-parents. We provide an alternative to high-cost, inefficient and adversarial court proceedings with an affordable, modern and compassionate approach towards resolution.

We offer services in-person at our offices located in the Ancaster, Meadowlands and virtually from anywhere in Ontario.

 

Let’s Connect:

Will We Need Lawyers if We Mediate Our Separation and Divorce in Ontario?

This is one of these most frequent questions we are asked by participants entering into the mediation process.

The answer is yes, you will need to have your own independent lawyers to assist you as part of the mediation process.

Let’s dive into why.

Understanding the Hesitation

The concept of hiring individual lawyers may seem counterintiutive for couples who are seeking to resolve the issues arising from their separation amicably through mediation. And we understand why.

There may be concerns about escalating conflict, increasing costs, or prolonging the resolution process. Some individuals may perceive hiring a lawyer as an indication of distrust or a lack of commitment to the mediation process. After all, the purpose of mediation is to resolve disputes amicably, without the need for adversarial legal battles, right?

But it is important that you understand the distinction between a mediator and a lawyer, and the role that independent lawyers play in the mediation process.

Your Mediator is Not Your Lawyer

Mediators cannot provide legal advice. This is true even if the mediator is an experienced family law lawyer.

Many separating couples share the common goal of amicably arriving at a resolution of the issues arising from their separation. However, when spouses separate there exist divergent legal rights and obligations that often conflict. The Law Society of Ontario has strict rules prohibiting a single lawyer from acting for two parties with different legal rights and obligations. Furthermore, a mediator’s duty is to remain neutral and impartial. Providing legal advice to both spouses could introduce the potential for a conflict of interest which could undermine a mediator’s ability to uphold neutrality and compromise the mediation process.

Therefore, a mediator cannot provide legal advice and it is important that each party consult with their own independent lawyer to receive legal advice regarding their individual rights, interests and obligations as part of the mediation process.

Lawyer-Assisted Mediation vs. Mediation without Lawyers

Before we delve into the role of lawyers in the mediation process, it is important to understand the difference between the two primary types of family mediation in Ontario: lawyer-assisted mediation and mediation without lawyers.

Lawyer-Assisted Mediation: In lawyer-assisted mediation, both parties have their own lawyers present during the mediation sessions. The lawyers provide legal advice and directly engage in negotiations. This type of mediation can be beneficial for more complex cases or when significant legal issues are involved. It offers the advantage of immediate legal counsel, which can help clarify legal rights and obligations on the spot, potentially expediting the process. However, in lawyer-assisted family mediation, the lawyers often take a central role in negotiating, which can shift the focus from an interest-based discussion to a more adversarial, law-centric approach. This can sometimes lead to solutions that prioritize legal outcomes over the unique needs and interests of the family.

Mediation Without Lawyers: Mediation without lawyers involves the couple working directly with a mediator to reach an agreement. The mediator is a neutral facilitator who helps the parties communicate, negotiate, and resolve disputes. In this type of mediation, the participants consult generally consult with their own independent lawyers outside of the mediation process to receive legal advice. This type of mediation allows the couple to have more direct control over the discussions and the outcomes, and to focus on issues that extend beyond the law.

Whether lawyers participate directly in the mediation process is something that is decided in consultation with the mediator, the participants and their lawyers and determined based on each family’s unique circumstances.

You can learn more about the Family Mediation Process Without Lawyers in our blog How Does Mediation Work for Separation and Divorce In Ontario?

The Role of Lawyers in the Family Mediation Process

Regardless of whether lawyers participate directly by attending mediation sessions or assist their clients outside of the process, independent lawyers serve the following important roles in the mediation process:

1) Providing Legal Information and Advice: Independent lawyers provide mediation participants with information and advice regarding their individual legal rights, obligations and entitlements. This helps mediation participants to understand the law, assess the reasonableness of the positions and options presented in mediation, and to make informed decisions as part of the mediation process.

2) Risk Assessment: Lawyers are experts at assessing potential risks and pitfalls that mediation participants may not have considered. Receiving advice from a lawyer helps participants to understand potential risks and make decisions that align with their long-term interests, and not only their immediate concerns at the time of separation when emotions are often running high.

3) Providing Support: Beyond simply providing legal advice and information, independent lawyers can also be a source of additional support for their clients, helping them to navigate the complexities of separation with understanding and empathy.

4) Preparing a Legally Binding Agreement: At the conclusion of the mediation process, the mediator will provide participants with a mediation report or Memorandum of Understanding summarizing the terms of any agreement reached in mediation. However, it is important to understand that this document is not a legally binding agreement. It is the role of independent lawyers to incorporate any agreement reached in mediation into a legally binding contract, which is usually in the form of a separation agreement in Ontario.

5) Providing Certificates of Independent Legal Advice: In Ontario, family law lawyers commonly sign certificates of independent legal advice in connection with separation agreements. These certificates, signed by the lawyers, confirm that the parties to a separation agreement have reviewed the agreement with their lawyers, understand the terms of the agreement, and have advised their lawyer they are signing the agreement voluntarily and without duress. Certificates of independent legal advice can play a crucial role in the enforceability of separation agreements. Without a signed certificate of independent legal Advice, there is potential increased risk that a separation agreement could be set aside by the court in the future. Due to this increased risk, sometimes lenders will refuse mortgages or other loans to separated spouses who do not have a separation agreement with attached signed certificates of independent legal advice, highlighting the importance of having a lawyer assist you with finalizing your binding agreement.

Choosing the Right Lawyers

Contrary to popular misconceptions, involving independent lawyers should not undermine the collaborative spirit of mediation. On the contrary, the involvement of lawyers often strengthens the integrity of the process by ensuring that participants enter into agreements with clarity, confidence, and a full understanding of their rights and responsibilities.

However, it is important to choose the right lawyers. Under the Divorce Act, in Canada family lawyers have a positive duty to encourage separating spouses to use a family dispute resolution process (such as mediation) prior to applying to court unless it would be inappropriate to do so. Nevertheless, there remain differences in the skill-sets and approaches of different lawyers.

Some lawyers are skilled courtroom advocates who are trained and who have developed expertise for litigation. Other lawyers are themselves mediators or collaborative professionals with specialized training on interest-based negotiation and on how to finalize agreements in an amicable setting.

If you are entering into a family mediation process with the view of reaching an amicable resolution, it is important to choose a lawyer who supports your goals, whose advice you trust and with whom you feel comfortable to communicate openly and honestly.

If you need help finding a lawyer, your mediator can assist by providing a list of lawyers in your area to reach out to.

Conclusion

In conclusion, while mediation offers a constructive and non-confrontational environment for resolving family disputes, the role of independent legal advice remains integral to the integrity and effectiveness of the process. By embracing the support and guidance of independent lawyers, participants empower themselves to make informed decisions, protect their rights, and ultimately achieve fair and sustainable resolutions that serve the best interests of all involved.

At Teal Family Mediation, we recognize the importance of independent legal advice and encourage all participants to seek the guidance of experienced lawyers throughout the mediation process.

Our mediation services are designed to support separating spouses seeking to mediate the terms of a separation agreement without lawyers, but we also provide lawyer assisted mediation services as needed.

Our mediators are also trained collaborative professionals which, allows us to offer collaborative mediation services, a unique form of lawyer-assisted mediation involving the participation of collaborative lawyers which you can learn more about in our upcoming blog post on Understanding Mediation, Collaborative Law and Collaborative Mediation.

We can work it out. Together.

Teal Family Mediation is team of professional divorce mediators located in Hamilton, Ontario offer mediation services for separating married and common-law couples and co-parents.We offer an alternative to high-cost, inefficient and adversarial court proceedings with an affordable, modern and compassionate approach towards resolution.

We offer services in-person at our offices located in the Ancaster, Meadowlands and virtually from anywhere in Ontario.

 

You can download our free Mediation Guide to learn more about our services or connect with us today to book a complimentary Discovery Call where we can answer any questions you may have.

If you are interested in learning more about how we can help you, let’s connect.

Let’s Connect:

Disclaimer: none of the information in this blog post should be construed as providing legal advice. Should you have questions about your legal rights and obligations, or about your legal process options when you separate, you should consult with an independent lawyer to receive legal advice.