Anyone sadly involved in a divorce will be aware of the financial as well as emotional cost. The House of Lords on 24th May decided two divorce cases (Miller and McFarlane). In both, one spouse had given up work and was awarded a large share of their earning spouse’s income. A day later, the Court of Appeal reached an important decision on pensions in divorce. These are important cases as they looked at respective contributions between partners in a marriage. They examined the idea of sacrificing a career to look after children and they explained how over time, generations or decades, what people and society think is fair in marriage and on divorce will change. In effect a couple could marry under one set of rules and be divorced later when the laws are different. The court maintained the principle that, where there is enough money, a clean break with no future support for the lower earning spouse is desirable. Mr Miller could afford this but Mr MacFarlane could not. Mr Miller’s wife was awarded £5m for less than 3 years of marriage and Mrs MacFarlane won half the couples’ assets (£1.5m) and £250,000 a year for life. It was not made clear what the position would have been had the spouses continued to work throughout the marriage but simply happened to earn less than their spouse because the work they were qualified or fit to do was lesser paid. There was also some difference in view from the various judges in the House of Lords about what the assets of a marriage are and which business assets might be excluded. However, the cases will help advisers in interpreting the law. At present, English law does not recognise pre-nuptial agreements either, although they can, if the court chooses, be examined so couples cannot arrange their affairs as they choose. Scotland has different divorce laws. It was announced in May that unmarried couples may be given some similar property and inheritance rights to those who are married, but the legislation has not yet been drafted so living together may not in due course avoid the impact of divorce law on couples either. The breakdown of the new Civil Partnerships between homosexual couples is already leading to a need for legal advice in such circumstances. The decision on pensions held that pensions are different assets from cash or property. Here the ex-husband was awarded £3m from his wealthier wife and the Court of Appeal increased this by £650,000 in May’s ruling, in holding that his £900,000 pension fund was not a cash asset in the same way a house or money might be. It has also emerged that the Government proposes to abolish the Child Support Agency and leave parents to enforce their own maintenance orders, except in difficult cases where a new agency will help them recover sums owed by a non-resident parent. If you need any legal advice in this area call William Donnelly on 02392 551500.
