How will a Court deal with divorce finances is probably the most frequent questions we are asked.
Unfortunately, there is no simple answer as there is no exact science in deciding divorce finances. The Court follows the legal principles from statute and from previous case law in making its decision, although each judge has discretion to do what they perceive to be appropriate on the evidence in each particular case. This means the precise outcome of cases involving divorce finances can be quite difficult to predict.
The statutory principles are set out in section 25 of the Matrimonial Causes Act 1973 and Schedule 5 to the Civil Partnership Act 2004. The Court’s first consideration is the welfare of any children involved. Alongside that, when determining an appropriate division of resources, the Court must consider:
- each person’s income, earning capacity, property, and other financial resources, available now or in the foreseeable future, including earning capacity;
- each person’s financial needs, obligations, and responsibilities relevant now or in the foreseeable future;
- the standard of living enjoyed by the family before the breakdown of the marriage;
- each person’s age and the length of the marriage;
- any physical or mental disability;
- contributions made or likely in the foreseeable future to make to the welfare of the family, including any non-economic contribution;
- the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it (although it is rare for conduct to be taken into account and the reason for the marriage or civil partnership breakdown is very unlikely to be a conduct issue for the purposes of a financial application), and;
- the value of each of the parties to the marriage of any benefit which that party will lose the chance of acquiring.
In determining how to apply these factors, the Court will have fairness as its overarching objective, and will apply the Section 25 factors according to the principles of “needs”, “sharing” and “compensation”. It is likely that fairness will be seen to suggest an equal division of all the matrimonial assets with first consideration going to any minor children and their carer. However, the Court may depart from an equal division if it is necessary to do so in exceptional circumstances, for example:
- If the marriage has been very short;
- If one party has made a contribution which substantially outweighs that of the other party. The extra contribution has to be in the significant;
- If a 50% spilt will not meet the needs of one of the parties, with primary consideration going to the primary carer of any children of the family.
It is important to note that although there is a process for the division of financial assets, divorce finance is decided is not governed by a code or tariff and therefore it is difficult to predict the exact outcome of the case. The reason for this is that Judges are given a very wide discretion in determining what is a ‘fair’ outcome to a case.
This discretion can manifest itself not only in differences between two Judges sitting in the same court, but also in geographical differences from Court to Court. For example, some Courts are ‘pro’ clean break, or ‘anti’ ongoing spousal maintenance, whilst others will not end spousal maintenance when there are minor children to the marriage.