Insights

Does the Court have to make a Clean Break in all cases?

Each case always has to be considered on an individual basis.  However, the Court is under a duty to consider the merits of the case and whether it would be appropriate to bring both parties’ financial obligations to the other to an end.  Whilst there is no presumption in favour of there being a financial clean break, sometimes, in certain circumstances, this is not appropriate and therefore the Court will consider a reasonable time frame. Where there are children (particularly young children) a clean break may not be fair or possible.   The Court will always consider the assets available to divide between the parties and assess both the immediate income of the parties (to meet their outgoings), as well as their future earning ability.

Sometimes spousal maintenance is considered as a way to ensure one party’s financial needs are secured albeit for a period of time only.  It may be that the Order creates a time frame for receipt of such or it may be that a lump sum is ordered for the benefit of one party. This is known as capitalisation of maintenance.  The intention of this type of Order would be to provide the receiving party with a sufficient fund to meet their income needs (without making an order for spousal maintenance), thus enabling an immediate clean break to take effect.

Where an order provides for a clean break between the parties (whether by agreement or imposed judgment), that the order approves how the capital assets are to be divided between the parties. The order will also state that all other claims between the parties are dismissed.  This means meaning that neither party can seek to bring any further claims against the other party in relation to the marriage or civil partnership in future.  This allows both parties to move on with their lives financially independent.

Is there only one type of Clean Break Order?

No.  As has been stated, each individual case is viewed and considered on its own individual merits.  Therefore, as every case is different, the orders have been developed to meet differing needs.  Clean break orders can also cover both  capital (the assets) and income (now and future).  Sometimes, the Clean Break Order will just refer to capital only.   Sometimes, the Clean Break Order may be deferred; or have triggering events (such as re marriage or death) that will bring it to an end. It is usual to ensure that the Clean Break Order ends claims that could be made against the other party’s estate on Death.  However, if there are children of the family or there is ongoing spousal maintenance, this may be modified.

If, by example, spousal maintenance is necessary, it may not possible to achieve  a financial clean break as to capital and income.  Therefore the Court may consider looking at the two aspects slightly differently.  It may be possible to end capital claims (by selling the matrimonial home and splitting the proceeds of sale between the parties)  but the income needs of the parties remain imbalanced.   The Court may order a Clean Break order as to Capital only in that situation and cover  ongoing payments of spousal maintenance.  In that case, neither party can seek any further orders against the other regarding capital assets flowing from  the relationship, to include  pensions, or lump sum payments or property adjustment orders.

In the alternative, there may be insufficient assets for capitalisation.  In those circumstances,  the Court could consider whether a deferred clean break is possible (and not an immediate clean break).  In such circumstances the Court will need to consider income resources of the parties (along with other balancing factors such as future earning abilities of the parties).  It may be appropriate to consider spousal maintenance and particularly, the  period of time that maintenance may be in payment for.  Sometimes, it is necessary for this to be for a fixed period of time only (to cover a particular life event for instance) or (albeit more rarely now) on  a joint lives basis .

The period of time that is ordered is considered by example, one of the parties qualifying into a role that would bring greater financial independence (therefore the period of time that spousal maintenance would run would be determinable and cover a period of undue financial hardship.  Sometimes, the Court may consider whether the term of spousal maintenance should be extendable or not. In that case, the beneficiary of the maintenance may apply for the Court to extend the term ordered.  Ultimately, after the period of time for payment has expired,  there will be a clean break between the parties.  Hence it is Deferred Clean Break.

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