What is a Collaborative Divorce Participation Agreement?

​Collaborative divorce provides an alternative process for parties seeking an out-of-court agreement. Collaborative divorce promotes agreement and free exchange of information through private negotiations. Each party hires an attorney and all four work together in a cooperative, non-adversarial process. Divorcing couples with a mutual goal of reaching a fair settlement are appropriate for the collaborative process. You may have recently decided this is the route for you — and your spouse agrees; but what exactly does it mean to sign a Collaborative Divorce Participation Agreement? ​

The Commitment: Signing a Collaborative Divorce Agreement

A Collaborative Divorce Participation Agreement (“PA”) is a written agreement by which both parties commit to work together towards a mutually beneficial outcome. The key element of a Collaborative Divorce Participation Agreement is that both parties agree that they will not ask a court to decide a disputed issue. If anyone does so, both attorneys must withdraw.

In this type of agreement, the parties and attorneys communicate and negotiate directly with one another in structured four-way settlement meetings. The Participation Agreement is a contract made by both parties to voluntarily disclose all financial and other relevant information, and to proceed respectfully and in good faith in settlement negotiations. In order to succeed in Collaborative divorce, both clients must be willing to hear the interests and concerns of the other spouse and be able to keep discussions respectful.

For Collaborative Divorce to work, each party must agree to:
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• Full and voluntary disclosure of financial information
• Negotiate in good faith
• Honestly share interests, goals and values

Typical Code of Conduct in the Collaborative Divorce Process
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In a Participation Agreement the parties agree to negotiate in good faith. What does it mean to negotiate in “good faith?”   

Section 3.3 B. of that Code of Ethics states that good faith negotiation requires that:

• Subsection 1: “Each client and professional takes a thoughtful and constructive approach on all unresolved questions in the interest of reaching agreements.” This means that the parties need to address all issues in a reasonable way. In Wisconsin, the Participation Agreement specifically requires that the clients work to create a range of resolution options and strive to meet the interests of both parties. A “take it or leave it” approach is not a component of good faith negotiation.

 

• Subsection 2: “Each client and professional complies with the Participation Agreement and any other formal and informal agreements made in the Collaborative Process.”  The Participation Agreement will contain enforceable promises to make full and voluntary disclosure of all information having a material bearing on the case. That means that concealing information which affects the outcome of the case must be disclosed, whether the other client or lawyer asks for that information or not. Additionally, when an interim agreement is made, good faith requires that that agreement be kept.  

 

• Subsection 3: “No client or professional takes advantage of inconsistencies, misunderstandings, miscalculations, omissions, or inaccurate assertions of fact, law or expert opinion.” This is about “fair play.” Oddly, there is no requirement in legal codes of ethics requiring a lawyer to correct such mistakes. However, settlements that are based on these types of mistakes or miscalculations are simply not effective settlements. When a settlement is based on an error, one person has been taken advantage of and denied the opportunity to reach an accurately informed agreement.  In these situations there may be post agreement motions to a court to set aside the mistaken settlement. Instead of a positive outcome, bitterness and distrust prevail.

 

• Subsection 4: “No client or professional threatens to undertake a Proceeding (court process) to coerce a particular outcome on an issue to be resolved by the Collaborative Process.” This component of good faith negotiation is intended to keep the process on an even playing field.  Early in a process, a threat to end a process can unbalance the negotiations and make a thoughtful and constructive approach to problem solving the issues of the case all but impossible.

When a client signs a Participation Agreement, the client is agreeing to be held to a high standard of conduct. The Collaborative client commits to respect the dignity of all and maintain integrity in negotiations.  This client is asking their lawyer to help them stay the course to find a settlement that works for all.

Confidentiality Protections

Is it safe to honestly share your interests and goals in the Collaborative process? The process is designed to create a safe place to disclose ideas and goals without the fear of those disclosures being used against the client in a subsequent proceeding. The Participation Agreement protects the documents and statements made by a client during a Collaborative meeting from being used in any later court proceedings. The negotiations in a Collaborative Process are confidential and protected as if they occured in mediation. In some states, the legislature has adopted the Uniform Collaborative Law Act which creates protection from the collaborative negotiations being used in Court, in Wisconsin, which does not yet have the Uniform Collaborative Law, the protection is conveyed by the Participation Agreement, as a form of mediation.

In Collaborative Divorce, a client promises to provide all information and to be totally transparent. As such, being secure in the confidentiality of the process is imperative. While the conversation inside the process is open and transparent, the confidentiality of the conversations inside the process is imperative. Everyone involved in this process is required to maintain confidentiality of all oral and written communication related to the divorce. The Collaborative team can work to draft and finalize the divorce in a way that shares the very minimum of financial and personal family information with the public.

Termination of the Collaborative Divorce Process

The Participation Agreement sets out a common understanding of how to  terminate the Collaborative Divorce Process. At all times during the process, either client has the right to leave the process and seek  court intervention. The Participation Agreement prescribes the notice requirements for taking this step.

In addition to a client terminating the process, either lawyer can terminate the process or withdraw representation. Reasons that might trigger a lawyer “withdrawing” might be when a party refuses to disclose financial and other related information to the other party. Reasons that might trigger a lawyer “terminating” a process would be drastic, for example, learning that a client is concealing material information and forbidding the lawyer from disclosing that information. When a lawyer withdraws, the process could continue with another Collaborative Divorce lawyer.

Collaborative Divorce Benefits Both Parties

The benefits of Collaborative Divorce are many, but the main one is its non-adversarial approach. Both parties are able to retain more control over divorce outcomes and can tailor solutions to best meet family needs and dynamics. The potential to maximize each party's best interests is much more attainable than in a traditional divorce.

If you chose the Collaborative Divorce Process, you will discuss the terms of the Collaborative Divorce Participation Agreement in your first team meeting with your spouse and the other lawyer. You may sign or defer signing the Participation Agreement to ensure that you wish to make this serious commitment. The Participation Agreement is the charter for your Collaborative Divorce, and is not to be signed lightly. When it is signed, it is the map for dissolving your marriage respectfully, swiftly and out-of-court. Learn more about the Collaborative Divorce Process in Milwaukee here.

For questions or to schedule a consultation with Attorney Diane S. Diel, please contact us. ​