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What Factors Does The Judge Consider When Making Orders In Divorce Financial Matters?

What Factors Does The Judge Consider When Making Orders In Divorce Financial Matters?

The Judge has to bear in mind the following: 

1. The types of orders available.

2. The Section 25 factors.

3. The relevant case law.

4. The facts of the particular case.

So detail is imperative and sways each case in a different direction.

Big Money cases where the assets are more than sufficient to cover the ends of the parties are different per White v White, Miller v Miller and McFarlane and are not discussed here in detail but will be a separate blog they are not based on the needs of the parties cases as there are surplus assets. But the Big Money cases principles are:

(a) A fair outcome in which discrimination plays no part.

(b) Fairness [ is not the same thing as equality] of provision.

(c) Where the Judge is considering departing from the equality principle, he should cross-check his tentative views against that yardstick of equality. Bear in mind that equality is a starting point, as well as a cross-check.

Before any division of assets, though, we have to work out whether the assets are matrimonial assets, so can we can discuss the exclusion of investments or assets pre-acquired.

If the assets are matrimonial in nature, then the starting point is to think of dividing equally, regardless of which party owns it, or the length of the marriage.

But an equal division is offset by a party’s particular needs or where one party needs to be compensated for relationship-generated financial loss. So typically you need to take that very important previous paragraph and apply it ruthlessly to the circumstances in which you act for a client.

The three underpinning principles of the Matrimonial Causes Act:

These tell a court how it should exercise its powers and are need, compensation and sharing.

Need is a wide principle and includes needs generated by the marriage, so accommodation for the kids, but also arising from age or disability. Need trumps all other principles; if there are only sufficient assets to meet the parties’ needs then compensation and sharing don’t apply.

Compensation is as per Miller and it’s a way of redressing significant prospective economic disparities between the parties arising from the way in which they have conducted their marriage. So if the parties have arranged their affairs in a way that has greatly advantaged the Husband in terms of earning capacity, but left the Wife unfairly handicapped in so far as her own earning capacity is concerned, then there needs to be consideration for compensation.

Compensation would usually apply, therefore, in maintenance (periodical payments), but also may be reflected in a larger capital distribution to even up the imbalance.

Sharing, then, in the context of the Matrimonial Causes Act 1973 usually means that when a couple marry they share the fruits of the marriage between them, both financial and otherwise. So the wealth belongs to each of them. This applies strongly to matrimonial property, but is less relevant to non-matrimonial property. Bear in mind, these are principles only and it takes experienced legal advice to apply them effectively to obtain a positive result for a client.

Then we turn to the Section 25 Factors as laid out by parliament.

Section 25 (1) states that:

It should be a duty of the court in deciding whether to exercise its powers under Section 23, 24, 24a or 24b to have regard to all the circumstances of the case and first consideration is to be given to the welfare of any minor children of the family who have not attained the age of 18 years.

In the case of Suter, the court said this is the first consideration but not an overriding consideration. The courts have to bear in mind all the circumstances but consider first the welfare of the children and then try to obtain a financial result that is just and fair between the spouses.

Section 25 (2) says the court has to have regard to the following matters in financial orders:

(a) The income, earning capacity and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity, any increase in that capacity which would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire.

(b) The financial needs obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future.

(c) The standard of living enjoyed by the family before the breakdown of the marriage. 

(d) The age of each party to the marriage and duration of the marriage.

(e) Any physical or mental disability of either of the parties to the marriage.

(f) The contributions which each of the parties has made or is likely to make in the foreseeable future to the welfare of the family including any contribution by looking after the home or caring for the family.

(g) 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.

(h) In the case of proceedings for divorce or nullity, the value to each of the parties to the marriage of any benefit which by reason of the dissolution or annulment of the marriage that party would lose the chance of acquiring.