As has been said on this blog many times, we have a discretionary system when it comes to dividing up finances on divorce. Factors to be taken into account have been set out by parliament, but parliament purposely left it to the courts to decide how those factors should affect the outcome in each case. As a result, much of the ‘guidance’ for courts has grown out of precedent, i.e. the decisions made by the higher courts over the years since parliament set out the law in its present form, at the end of the 1960s.
Perhaps the most important precedent in the area of financial remedies following divorce is the case of White v White, decided by the House of Lords in October 2000. White set out what became known as the ‘sharing principle’. The sharing principle essentially set out a ‘starting point’ in all cases that the assets of the marriage should be shared equally, unless there is a good reason to do otherwise.
The principle has been elaborated upon by subsequent cases, including consideration of what might be a good reason to depart from equality. One such reason is that the marriage was of very short duration and childless, as in the case Miller v Miller, in which after a three year marriage the wife received an award of £5 million, out of assets worth £32 million.
This week it has been reported that a wife is appealing against an order that, after a four-year childless marriage, awarded her ex-husband getting on for half of the assets, almost all of which she accrued. According to the report the assets came to some £6.9 million, and the husband was awarded £2.7 million. The wife is apparently asking the Court of Appeal to reduce that to £1.2 million. The Court of Appeal has reserved judgment, so we don’t yet know the outcome, or the full details.
Now, clearly there must be some point at which the sharing principle ‘takes over’ from the ‘short marriage principle’. Of course, the answer to when this is in any particular case can be found in the first paragraph of this post: the judge has a discretion to decide when that point occurs, having regard to all of the circumstances of the case.
I could now enter into a discussion of the various learned judicial pronouncements relevant to when the ‘cut off’ between short marriage and sharing principle should be, but I want to restrict this to my own thoughts on the subject.
My own starting point is that, as a generalisation, the sharing principle must surely be correct. After all, marriage is a joint venture, and both parties should benefit equally. Thus, for example, where one party is the primary breadwinner and the other party devotes their time to looking after the home and bringing up any children, then the non-breadwinner should have an equal entitlement to any assets, even if they were not directly responsible for acquiring those assets. There is the matter of ‘non-matrimonial assets’, i.e. assets that should not fall into the pot for division, but that is another issue.
Now, the watchword when it comes to sorting out financial claims is, of course, fairness. Whatever settlement is decided upon, it should be fair to the parties, having regard to the circumstances of the case. Thus, it is not considered fair that after a very short marriage a party who has made no contribution should walk away with half of the other party’s assets. I think most people would agree with that.
However, despite the need for clarity in the law, there can never be a fixed point at which the sharing principle takes over from the short marriage principle, for example three years from the date of the marriage. That would not result in fairness in all cases, and it would have the obvious problem that some spouses would purposely ‘hang on’ until the cut-off point is reached, before commencing divorce proceedings. No, there must be flexibility, even if that makes the law more uncertain, and more difficult to advise upon.
We don’t seem to be getting very far. If I were to continue this discussion I would inevitably find myself looking at those factors that those learned judges have raised, such as whether the finances of the parties have become so intertwined by the marriage that anything other than equal division is no longer appropriate. In other words, the only way that you are going to find an answer to the question is to seek expert legal advice, and even then the definitive answer will only come from the court.
In short (excuse the pun): how long is a piece of string?