Insights

How does the Court decide what is fair in a financial settlement?

How does the Court decide what is fair in a financial settlement?

In determining what order to make, the Court has a wide discretion which means that it can make orders that best suit an individual family’s circumstances. It has the duty to consider all the circumstances of the case. The starting point for the Court in terms of their approach to dividing matrimonial assets is a 50:50 division, with first consideration being given to the welfare of any child of the family under the age of 18.

Therefore  the Court can depart from this with a view to achieving fairness, such as if one party’s needs dictate that they should be entitled to a greater share.  Consideration is also given to any agreement made before or during the marriage (a pre-nuptial or post-nuptial agreement).  These agreements can also have a significant effect on what the court decides.

Although the Court needs to have regard to all the circumstances of the case, Section 25 of the Matrimonial Causes Act 1973 sets out a list of factors that the Court must have particular regard.  The weight attached to each factor will adjust from one case to another. In brief, the specific factors the Court must have regard to are:

• each person’s income, earning capacity, property and other financial resources that are available now and/or in the foreseeable future
• each person’s financial needs, obligations and responsibilities as they are now and/or in the foreseeable future
• the standard of living enjoyed by the family before the breakdown of the marriage or civil partnership
• each person’s age and the length of the marriage or civil partnership
• any physical or mental disability that either party has
• contributions that each person has made, or is likely to make in the foreseeable future, 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 the Court considers it would be unfair to disregard it (although it is very rare for conduct to be taken into account unless it directly affects the parties’ finances), and
• the value of any benefit which either party will lose the chance of acquiring as a result of the divorce or civil partnership dissolution.

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