Article from the Journal Family Supplement

“ Divorce is like a root canal; never wanted, sometimes needed”. (Elizabeth J Griffith)

Most people either know, or assume, that on divorce a Husband or a Wife can be ordered to pay their ex-spouse “periodical payments” which will be assigned to provide towards housing costs and capital needs together with a share of any future income to meet the recipient’s income needs. Please note that this is all distinct from child maintenance.

Agreeing on a financial settlement usually comes in the final stages of the divorce process. Whilst a clean break with a capital one-off payment is the most desirable outcome, this is not always possible and making the provision for spousal maintenance can become a very high maintenance exercise to undertake.

Historically, orders read that the payments were to last until death or further order, with a built in review for RPI/CPI.  This is known as a “joint lives order”.  Maintenance may also cease, by prior consent, upon cohabitation or may continue until such time as both parties agree to end the arrangement. Spousal maintenance will automatically cease upon the recipient’s remarriage. Either as the payer or as the receiving party (payee) a maintenance clause in a financial order leaves a foot in the door after divorce.

There are winds of change gathering pace as a result of recent decisions about the level and the length of financial orders.

Deciding what is “fair” in the first instance is open to debate. In the words of the Honourable Justice Coleridge in V v V [2005] 2 FLR 697 there are “no hard and fast rules” when it comes to determining maintenance.  Each case is decided on its facts.  You may have been advised to pay about 1/3 of your income or 40%.  The extent of discretion and myriad of orders made makes the advice of an expert in Family Law essential.

Since the breakthrough cases of White in 2000 and Miller and MacFarlane in 2006 there is an established test of “fairness” as a guiding principle to division of capital and income and the 3 principles of need, compensation and sharing. However, it is generally accepted since the guidance from Lord Justice Thorpe in McFarlane and Parlour that an order for equality of income is not appropriate, which rules out “sharing” of future income.

In 2012 we also have guidance from two cases of B v S [2012] and G v G.  Both of these cases tell us that in quantifying the level of maintenance we should address “need” and that any element of compensation, for loss of income due to the marriage breaking down, should be exceptional.  It is a shift towards the absolute clean break thinking of Europe and our Scottish neighbours.  This had been emphasised in an earlier case of VB v JP in [2008] when it was said that a clean break should be achieved wherever possible. I am largely in agreement.

Variations in maintenance levels may be requested which can be costly and complicated. For example, the payer may go on to financially do very well but then face the uncertainty of being asked by the payee for a corresponding increase in maintenance. Or perhaps the payee becomes tired of receiving pay-outs and financial dependency on an ex-spouse and may therefore request a capital lump sum instead.

An order can be varied up and down and “capitalised” into a further capital payment under s.31 Matrimonial Clauses Act 1973 if there is a “change of circumstances”.  This capitalisation of maintenance can be an attractive prospect and means financial links between the parties are severed once this has been agreed and put into practice. It is attractive for the payee if they are involved in another relationship which may yet result in marriage, in which case spousal maintenance would cease. It is less attractive to the payer if they have built up capital since the divorce, when a clean break would have been impossible, but are now be faced with a request for a lump sum.

As I mentioned above, if you are going to settle your case on a continuing maintenance basis, bear in mind that section 31 of the Matrimonial Causes Act 1973 can be a blessing or a bane. The curse and the cure of English family law is judicial discretion and the wide range of outcomes available.

Joanne Major is owner of Major Family Law, the Divorce and Family Law Specialists, Ponteland, Newcastle Upon Tyne, NE20 9SU.

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