Divorce is arguably one of the most stressful processes that is undertaken in someone’s life. When you marry you have the intention of being with one another for life, but sadly, this is not always the case. Divorce is commonplace in our society with the strains of life impacting upon the journey and experience of marriage.
Within the divorce process, the division of the finances is often an area of disagreement. In the absence of an agreement as to how this challenging issue should be approached the courts in England and Wales have jurisdiction to decide how finances should be divided and what order should be put in place to create as close to an “equal” division as possible, whilst balancing the outcome against fairness and meeting needs as a priority. The guidelines for this process are nearly 50 years old and are outlined in the Matrimonial Causes Act 1973, and specifically section 25 of that Act.
This section highlights the important factors a court must give regard to when determining a financial provision:
- Income, earning capacity, property and other financial resources;
- Needs, obligations and responsibilities of all involved;
- Standard of living enjoyed by the family;
- Age of each party and the duration of marriage;
- Physical and mental health condition;
- Contributions made by each party to make the welfare of the family, either financial or by looking after the home and caring for the family;
- Conduct of each party provided it would be inequitable to disregard the same; and,
- Value to each party to the marriage of any benefit, which upon divorce, a party would lose the chance of acquiring.
This legislation has been interpreted by the courts to mean that the grounding principle is one of sharing and fairness, leading to a usual starting point of a 50:50 division. There are, of course, exceptions to this, such as one party having sole care of the children, or an entirely unequal contribution from one party which should be fairly reflected in the award that is made.
This half-century legislation has now been reviewed under a scoping paper by the Law Commission. This is a standalone publication which is focused on the exploration and understanding of the relevant area of law, and to consider if there are any glaring issues or instances that could require reform to further assist all participants, including us lawyers, to reach solutions that are fair.
The scoping report was received in December 2024 and some of the key points are as follows:
- Only 32% of divorcing spouses used legal advice or support.
- The Law Commission noted the critique of the law, including that the wide discretion in the law encourages disagreement and dispute, rather then support a settlement, even with legal advice. We would certainly share this experience.
- The Law Commission concluded that the current law was indeed in need of a reform, but did not comment on the potential remedies; labelling it the role of the Government.
- The Law Commission offer 4 “models” upon which reform could be based where there is less discretion for the judge and a more certain predictable outcome or vice versa.
- The Law Commission also commented on the conduct of a party and if this should influence the outcome – presently this is not the case unless the conduct is at a very high level – any clarity here can only be beneficial to the court process and the parties.
- There was further discussion on Nuptial Agreements, which are agreements made by couples either before or during a marriage; commonly referred to as “pre-nups.” A 2014 report by the Law Commission recommended the possibility of these to be legally binding, providing certain criteria were met. The Law Commission continued to support its own train of thought, suggesting that there was “broad support for implementation” so this appears to remain very much up in the air.
Until these areas are developed we are left with a system where the court has wide discretion and this leaves the outcome often difficult to anticipate. For now, at least, these matters will be very much determined and agreed on a case by case basis with a continued client need for expert legal advice to help navigate this wide discretion in the path to a settlement or a final decision imposed by a judge.
At Dunn & Baker Solicitors our family law specialists realise that at the end of the day the parties usually seek a divorce that is respectful and minimises the impact to each other and any children. Our expert team strives to assist our clients in reaching settlements that meet each parties needs and are practical and fit for future day to day purpose.
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