Best Guidance for Financial Orders in Divorce proceedings

Peeling away any misperceptions. A new national lead Family Judge is appointed – what will be the impact on divorcing couples in financial remedy cases? Our head of family – Associate Partner and Collaborate Lawyer, Julie Slater-Williams highlights a crucial case for financial remedy proceedings.

The President of the Family Division appointed Mr Justice Peel as the National Lead Judge of the Financial Remedies Court and Judge-in-Charge of Standard Family Orders with effect from 20^th April 2022. Mr Justice Peel will fulfil this role for 4 years. His approach and guidance will be looked at and implemented by many family Judges throughout the country.

It appears that our new lead Judge has set out his expectations to divorcing couples and their lawyers. There are often competing arguments between divorcing couples as to how their financial assets should be split. As lawyers, we look at the guidance provided by the Courts so that we can best advise our clients in the relative merits or otherwise of the facts of their case.

This case is a beautifully clear synopsis of the law and one that we think our clients will be well advised to consider with us when we are assisting them with their cases.

Here’s the rundown on what he said in his recent case of WC v HC 2022 EWFC:

As a matter of practice, the court will usually embark on a two-stage exercise, (i) computation and (ii) distribution.

The objective of the court is to achieve an outcome which ought to be “as fair as possible in all the circumstances”;

There is no place for discrimination between husband and wife and their respective roles;

In an evaluation of fairness, the court is required to have regard to the s25 criteria, first consideration being given to any child of the family.

There is a powerful encouragement towards a clean break.

The three essential principles at play are needs, compensation and sharing;

In practice, compensation is a very rare creature indeed.

Where the result suggested by the needs principle is an award greater than the result suggested by the sharing principle, the former shall in principle prevail;

In the vast majority of cases the enquiry will begin and end with the parties’ needs. It is only in those cases where there is a surplus of assets over needs that the sharing principle is engaged.

Pursuant to the sharing principle, (i) the parties ordinarily are entitled to an equal division of the marital assets and (ii) non-marital assets are ordinarily to be retained by the party to whom they belong absent good reason to the contrary;
The evaluation by the court of the demarcation between marital and non-martial assets is not always easy. It must be carried out with the degree of particularity or generality appropriate in each case. Usually, non-marital wealth has one or more of 3 origins, namely (i) property brought into the marriage by one or other party, (ii) property generated by one or other party after separation (for example by significant earnings) and/or (iii) inheritances or gifts received by one or other party. Difficult questions can arise as to whether and to what extent property which starts out as non-marital acquires a marital character requiring it to be divided under the sharing principle. It will all depend on the circumstances, and the court will look at when the property was acquired, how it has been used, whether it has been mingled with the family finances and what the parties intended.

Needs are an elastic concept. They cannot be looked at in isolation. In Charman (supra) at [70] the court said.

In an appropriate case, typically a long marriage, and subject to sufficient financial resources being available, courts have taken the view that the lifestyle (i.e “standard of living”) the couple had together should be reflected, as far as possible, in the sort of level of income and housing each should have as a single person afterwards. So too it is generally accepted that it is not appropriate for the divorce to entail a sudden and dramatic disparity in the parties’ lifestyle.

That said, standard of living is not an immutable guide. Each case is fact specific

The source of the wealth is also relevant to needs.

At Keely LLP we keep up to date with the most recent case law developments so that our clients are being guided through the divorce and financial remedies process with the most recent judgements and guidance in mind.

When you’re deciding who to instruct to deal with what might be the most important financial arrangement of your life, make sure you’re instructing a firm with a solid reputation based on the best advisor model and with the most up to date information to hand.

Our family department is available to support and assist you. Please contact us on 01543420000 or by email: jslater-williams@keelys.co.uk