Your Finances in Divorce: How Will Your Case Be Decided?

Posted by familylaw on 19th December 2011

Once disclosure is to hand then it can be considered in light of all the facts of your case, and in particular, the various facts laid down by legislation, which the court, and hence solicitors when advising their clients, may have regard to.

Unfortunately, there is no set formula to dictate any sort of percentage settlement. The overriding principle is that of Fairness. The court emphasizes the need for any financial settlement to be fair to both yourself and your spouse and will have regard to the facts laid down by legislation to arrive at a conclusion as to what is fair.

These factors are as follows:

• Income and earning capacity, property and other financial resources which each spouse has or is likely to have in the foreseeable future including, indicated as earning capacity, any increase in that capacity which would be in the opinion of the court reasonable to expect the person to require.
• The financial needs, obligations and responsibilities, which each spouse has or is likely to have in the foreseeable future. Needs are an important consideration. The principle is that each party and the children should have enough to meet their needs assessed at a standard similar to that enjoyed during the marriage. Often, the available assets are insufficient to provide adequately for both parties. In that situation, the main carer of the children’s needs will be meet first.
• The standard of living enjoyed by the family before the breakdown of the marriage.
• The ages of each spouse and the duration of the marriage.
• Any physical or mental disability of each spouse.
• The contributions that each spouse has made or is likely to make in the future to the welfare of the family including any contribution by looking after the home or caring for the family.
• The conduct of each spouse if that conduct is such that it would be in the opinion of the court inequitable to disregard. This has to be very serious conduct, for example, serious financial misconduct, severe violence or sexual abuse. The fact that you or your spouse may have pursued adulterous relationships will not count as conduct and has no relevance to the issue of finances.
• The value to each spouse of any benefit which one spouse because of the divorce would lose. This usually applies to pension provision.

However, the first consideration, before looking at any of the above factors will be the welfare of the children. It is not to be seen as the most important factor but it is the first factor any court will look at.

Additional Principles to Consider

The court also considers two other principles, which have recently emerged from decisions made by the House of Lords. These apply to cases where there is more than enough money to meet each party’s needs.

Sharing

The first is that of “Sharing”. The courts see marriage as a partnership and the fruits of that partnership should be shared.

Compensation

The second principle is “Compensation”. The courts will look at the way in which your financial affairs where managed, for example, did one of you stay at home and care for the children whilst the other worked. If this is the case, the court may conclude that the person that stayed at home may have lost out on the chance of accruing assets or income and therefore should be compensated for this.

Unfortunately, the current state of the law does create a situation where we cannot be certain as to the outcome of any financial settlement. The court will balance your claim and that of your spouse with reference to the above factors. A lot will depend upon the facts of your individual case and the discretion of the Judge on the day of the hearing (if it proceeds to court). In addition, throughout your case, new law may come into force. If this is the case then those new laws will apply to your case.

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