The Law Commission of England and Wales has launched a review of the laws which determine how finances are divided among couples after divorce or the dissolution of their Civil Partnership.
The relevant laws can be found in the Matrimonial Causes Act 1973 and particularly around Section 25. In themselves, those laws are quite simple, but in the 50 years since the laws were passed there has been a vast body of decided court cases which lawyers consult and follow in order to advise their clients as to how the courts will approach the division of finances on divorce or dissolution of a partnership.
The 50 year old laws were framed in such a way that the court has the ultimate discretion as to whether or not to approve a financial agreement reached between a divorcing couple. This is subject to various factors which the law requires the judges to take into consideration.
In summary the factors are:
- The income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future;
- The financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
- The standard of living enjoyed by the family before the breakdown of the marriage;
- The age of each party to the marriage and the duration of the marriage;
- Any physical or mental disability of either of the parties to the marriage;
- The contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;
- The conduct of each of the parties, if that conduct is such that it would, in the opinion of the Court, be inequitable to disregard it;
- The value to each of the parties to the marriage of any benefit which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring (e.g. a pension).
In cases where there are young children, the Court’s first concern will always be the welfare of those young children and how their needs will be met. In reality, the decisive factor in the majority of cases is the reasonable needs of the parties and the children of the family.
The interpretation of these laws by the courts over the last 50 years is of vital importance and extremely useful to the lawyer practising in family law finances.
The Commission is due to finalise the report in September 2024 and there will no doubt be recommendations for legislative reform.
Let us hope that the legislative reform is sensible and does not simply brush away 50 years of acquired wisdom.
