Gary Lineker may have stirred it up, but the debate about whether we could or should have a formula or formulae to determine financial/property settlements on divorce has raged for as long as I can remember. Marilyn Stowe gave her views on the debate in her excellent post here last Saturday (I particularly agree with her that many of those who call for the introduction of a formula only do so because they are disgruntled with their own experience of our present system and/or have a grudge with divorce lawyers generally).
For what it’s worth I thought I would add my own few thoughts to the debate.
I will do so by having a look at what might be involved in putting a together a formula that roughly reflects the aims of our current system, in particular that achieves the twin goals of fairness and meeting the needs of the parties.
The first thing to say is that it seems to me to be quite impossible to create one overall formula that covers everything, including division of capital assets, income needs (i.e. spousal maintenance) and pension sharing (I am leaving out child maintenance, as we already of course have a formula for that). I am therefore going to make my life considerably easier by looking at three separate formulae for capital division, spousal maintenance and pension sharing. In doing so, I hold my hands up and admit straight away that I am already committing (at least) two errors: firstly, over-simplifying all of the possible orders that the court can make (for example I ignore pension attachment orders, amongst other things), and secondly I am ignoring the very significant fact that each of the three areas can impact upon the other, for example there may be a trade-off between more maintenance and less capital, or vice versa.
OK, having got that out of the way let’s look at those formulae (and yes, I know that what follows is probably full of logical errors).
I shall begin with capital division. The first consideration must be: what variables do we need to put into the formula? The obvious one is:
T = total assets of the marriage
T, however, may be made up of assets that existed prior to the marriage (I shall call those ‘P’) and assets that came into existence during the marriage (‘D’). Thus:
T = P + D
Of course, P needs to be separated into those assets which belonged to each party: husband or wife. Accordingly, P = PH + PW. We therefore now have:
T = (PH + PW) + D
Still with me? Good. Moving on, we now have to find a way to take the needs of each party into account. We will call needs ‘N’. Of course, there are the needs of each of the parties, so we actually have ‘NH’ and ‘NW’.
Right, at this point my brain is starting to hurt, so for the purpose of this exercise we’ll not bother here with any more variables. We now have to come up with the formula.
OK, we can probably all agree that the basic starting-point should be equal division. We could also have a ‘matrimonial property’ arrangement, whereby each party keeps what they had prior to the marriage. Thus:
H receives: PH + (D ÷ 2)
W receives: PW + (D ÷ 2)
So far, so good. Now we have to input needs into the equation, and this is where it starts getting tricky.
We know that needs trumps equal division and, usually, matrimonial property, so we could just say, for example:
If NW > [is greater than] (PW + (D ÷ 2)) then W should receive NW
H will then of course receive T – NW.
However, there are at least two problems with this. Firstly, it assumes that T > NW, and secondly, what if HW is also > (HW + (D ÷ 2))?
And once those problems are resolved, we still have to factor in such matters as insufficient assets to cover the needs of either party, non-matrimonial assets acquired during the marriage (such as inheritances), conduct, compensation, stellar contributions, etc., etc…
In order to retain what little remains of my sanity, I’m going to leave it there. However, I think we can already begin to see just what might be involved in creating a formula that achieves a fair result in all situations. And remember, this is just for capital division. It may be completely impossible to create such a formula, but even if it is possible, it is quite clear that the formula is likely to be horrendously complicated. Could it be that we are actually better off with our present system in which the judge uses his or her discretion to decide what is fair?
The eagle-eyed reader may have spotted that I haven’t looked at formulae for spousal maintenance or pension sharing. Perhaps another time…