There has been recent press coverage of couples in multi-million divorce settlements where one spouse has tried to obtain 50% of the assets from the other spouse. There has been a growing assumption in recent years that this is the entitlement. However, the Court’s starting point in any financial settlement is to look at the statutory criteria laid down by s25 of the Matrimonial Causes Act 1973.
The first consideration laid down by s25 (1) is the welfare of any children of the family. Then the Court will look at s25 (2) and eight factors when deciding any financial orders for a spouse. These factors are:
- The income, earning capacity, property and other financial resources of each party
- The financial needs, obligations and responsibilities of each party
- The standard of living enjoyed by the parties in the marriage
- The ages of each party
- Any mental or physical disabilities of each party
- The contributions that each of the parties has made or is likely in the foreseeable future to make to the welfare of the family
- Any conduct of either party (it is predominantly bad financial conduct that a Court would consider)
- Any loss of opportunity a party has been subject to due to the marriage or divorce
Until the landmark case of White v White  the courts approach had been to ascertain what the reasonable needs or requirements of the financially weaker party was (usually the wife) and nothing further. In White this approach was altered dramatically and the Court decided that the objective should be to achieve a fair outcome. Each case, in conjunction with the s25 factors would be decided according to the relevant facts of that case and what is fair between the parties. In practice, what this means is that there can be no distinction between a breadwinner and a homemaker when dividing up the couple’s assets. The parties are entitled to equal treatment and as a general rule equality should only be departed from if there is a good reason for doing so.
One reason to deviate from the principle of equality and not divide the assets equally after a marriage of, say, 25 years is where one party has made a ‘stellar contribution’. These cases are very rare and requires the party arguing the point, to prove that they have generated a vast fortune from his or her own unique skills and endeavours.
Another ‘good reason’ to depart from a 50:50 approach is where one party has brought considerable assets of their own to the marriage and that asset has never become part of the family finances. An inheritance, maybe, which had remained in the sole hands of its recipient. In such circumstances, the party with the financial advantage would seek to retain more than 50 per cent of the assets and it is likely that if the other party’s needs have otherwise been met, there would be an unequal division. However the Courts will look at the facts on a case by case basis, some judges will exclude them from the matrimonial pot whereas another judge may conclude that these assets should not be treated any differently from any other asset in the case. The Court’s overarching responsibility is whether the assets whether non-matrimonial or not are required in order to meet the needs of the parties and their children. It is significant that s25 does not distinguish between matrimonial and non-matrimonial assets.
It is always possible for the parties of a divorce to settle matters outside of the courtroom on terms agreed between themselves. Any such agreement (provided the Court considers it to be fair) can then be sealed by the Court as a binding order upon the parties involved.
Paul Wild, our Head of Family Law, is a trained mediator and collaborative lawyer who places an emphasis on reducing conflict and working with clients and other solicitors to reach agreement on the key issues including financial settlements. To benefit from Paulu2019s expertise and issue focused approach call 0118 9589711 to find out more or to book an initial fixed fee appointment for £95 including VAT. Alternatively, you can contact Paul by e-mail at [email protected] or his assistant Liz Hurley by email at [email protected]